Maria Dario vs Ubumwe women group

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA BUKOBA SUB-REGISTRY AT BUKOBA PC CIVIL APPEAL NO. 17513 OF 2024 (Arising from Civil Appeal No. 7583 of2023 District Court of Ngara; Originating from Nyamiaga Primary Court in Civil Case No. 62 of2023) MARIA DARIO....................................................................... APPELLANT VERSUS UBUMWE WOMEN GROUP................................................... RESPONDENT JUDGMENT 22nd January and 18th February, 2025 BANZL J.: This appeal originates from Nyamiaga Primary Court (the trial court) where Ubumwe Women Group (the respondent) sued Maria Dario (the appellant) for recovery of TZS 5,164,000.00. It was alleged that, the appellant who was serving in the capacity of chairperson of Ubumwe Women Group, unlawfully misappropriated the said sum which was entrusted to her by the Group. The facts gathered from the testimonies of witnesses before the trial court reveal that, Ubumwe Women Group is a group of five women including the appellant who associated themselves with an intention of securing a loan from Ngara District Council in order to further their business. The group was Page 1 of 14 dealing with retail sales of clothes through a shop that was opened after getting business licence and taxpayer identification number. The latest loan of TZS 25,000,000.00 was advanced to them as a group by the Council in 2021 that was supposed to be repaid by instalments within one year. According to the testimonies of SMI, SM2, and SM3, after securing that loan, each member was given a certain amount for her own business but they were supposed to repay the same collectively. According to them, the appellant being their chairperson, was responsible for collecting sums of repayment monies from all members of the group and in turn deposit whole­ sums into the account of the lender (the Council). In four instances, they collected that monies, handed over to the appellant hoping that the same was deposited into the lender's account; to the contrary, sometimes later, they were informed by a social development officer of the Council that, they had outstanding debt of TZS 12,592,000.00. After verification, it came into their knowledge that, the appellant was not banking the whole amount that was collected from members. Efforts to repay the debt through the appellant proved futile; eventually, the remaining members with exclusion of the appellant decided to clear the debt with the lender, envisioning that they would recover their money from the appellant thereafter. Despite promises Page 2 of 14 from the appellant that she would repay that money before the other members and some officers of the Council, efforts to recover that money amicably, or as it was promised proved futile; hence, they decided to institute a case before the trial court to recover that money. In her defence, the appellant contended that, after meeting the requirements of securing loans from the Council, as a group, progressively they obtained some small loans, until in 2021 when they borrowed TZS 25,000,000.00. It turned out that, their business did not go well as expected, in particular due to the impact of the Covidl9 pandemic. Therefore, repayment of loan was not as smooth. Moreover, in the same year, she got pregnant, thus was unable to fully participate in running the business, as mostly she was bed rested. For that reason, she left the others to run the business, including to oblige in repaying the loan to the lender (the Council). Further to her misfortune, she had a premature baby, for which she spent three months nursing it without getting out. Regardless, the rest of the members managed to clear the loan without any problem as the sales from the shop were sufficient not only to repay the loan, but also carter for administrative and other expenses. According to her, the quarrel occurred after the other members conspired to take another loan without her Page 3 of 14 knowledge. After following up, she came to know about the contention from the other members that, she allegedly failed to repay the loan which compelled them to pay some TZS 6,000,000.00 for her. They also informed her that, she was no longer a member of the group as they dismissed her and selected Aziza Rudahula as their new chairperson. They later preferred a criminal charge against her for allegedly stealing TZS 5,000,000.00 before the trial court which decided in her favour; in the stead of that, they decided to come back with a civil case subject to this appeal. After receiving the evidence of both sides, taking into account that the appellant had once conceded to owe the respondent TZS 4,982,000.00 the trial magistrate was satisfied that, the case was proved against the appellant, hence, she was ordered to pay TZS 4,982,000.00 to the respondent. Dissatisfied with the finding of the trial court, the appellant unsuccessfully appealed to Ngara District Court (the first appellate court), hence, this appeal comprising of two grounds thus: 1. That the trial court and the 1st appellate court erred in law and fact for awarding the respondent basing on the testimony of Advocate Baraka John Samuia who was neither party to the case nor witness; Page 4 of 14 2. That both lower courts erred in fact to decide the case in favour of the respondent while did not prove the case as required by law. However, before the hearing, the appellant prayed and was granted to file additional grounds of appeal thus; 1. That, the 1st appellate court erred both In law and In fact to uphold the decision of the trial court which held in favour of the respondent who did not substantiate the claims leveled against the appellant to the required standard ofproof; 2. That, the 1st appellate court erred both In law and in fact to entertain the case of the respondent who was devoid of locus standi to institute the case against die respondent; 3. That, the 1st appellate Court erred both in law and fact to uphold the trial court's decision that the appellant admitted and therefore is liable to pay Tshs.4,982,000/= to the respondent whereas not since the respondent never lent any money to the appellant and Advocate Baraka Samula's intervention to settle the matter out of court proved futile for lack ofmerit leading to conducting a full case trial. At the hearing, both parties were unrepresented and by consent, the appeal was argued by way of written submissions. For purpose of Page 5 of 14 convenience, I find it prudent to start with the second ground in the additional grounds of appeal concerning the locus standi of the respondent to institute the case against the appellant before the trial court. Arguing in support of that ground, the appellant submitted that, Ubumwe Women Group has no locus standi to sue her in that name because it is not registered under any written law of the United Republic of Tanzania to be able to assume legal personality capable of suing or be sued on its name. According to her, the respondent is a non-existent legal person thus, it could neither sue or be sued under that name. She went further contending that, there was no written group members' consent for some of the members to represent other members in the court, therefore, those who testified before the trial court acted ultra vires. She added that, locus standi is a jurisdiction issue and can be raised at any stage even at second appellate level. She supported her argument by the cases of Ally Ahmad Bauda v. Raza Hussein Ladha Dhamji & Others (Civil Application No. 525 of 2016) [2020] TZCA 1763 (2 September 2020) and Lujuna Shubi Balionzi, Senior v. Registered Trustees of Chama Cha Mapinduzi [1996] TLR 203. She concluded that, the respondent had no locus standito institute Civil Page 6 of 14 Case No. 62 of 2023 before the trial court and she urged this court to nullify everything transpired below. In response, the respondent contended that, Ubumwe Women Group had locus standi to institute the case against the appellant to the court of law to claim for the money that was not paid by one of its members. According to her, the group has legal personality under the laws of Tanzania namely, Government Notice No. 217 of 2020, Financial Laws for the Local Government Authority and its Regulations, Sheria ya Huduma Ndogo za Kifedha za mwaka 2018 and Kanuni za Huduma Ndogo za Fedha (Vikundi vya Kijamll vya Huduma za Kifedha) za mwaka 2019. From these laws, the group is issued with certificate of recognition and hence, it acquired legal personality with right to sue and to be sued. Having carefully considered the record and submission of both sides, the main issue for determination is whether the respondent had locus standi to sue the appellant in that capacity. It is a settled principle of law that, for a person to institute a suit in the court of law, he or she must have a locus standi. The phrase locus standi is defined in the Black's Law Dictionary Nineth Edition, to mean: Page 7 of 14 "The right to bring an action or to be heard in a given forum." Expounding this principle, in the case of Lujuna Shubi Ballonzi, Senior v. Registered Trustees of Chama Cha Mapinduzi {supra), this court stated that: "Locus standi is governed by common law according to which a person bringing a matter to court should be able to show that his right or interest has been breached or interfered with." The same position was underscored in the case of Ally Ahmad Bauda v. Raza Hussein Ladha Dhamji & Others {supra). It is worthwhile underscoring here that, the right to bring a matter to court is only available to natural or legal persons such as corporations and or their recognised agents as per Order III rule 1 of the Civil Procedure Code [Cap 33 R.E 2019]. In our jurisdiction, the legal personality which the respondent purports to have vests in such entities as companies duly incorporated under the Companies Act [Cap 212 R.E. 2002] and other entities conferred with legal personality by statutes under which they are established. An example of such entities are cooperative societies registered under the Cooperative Societies Act [Cap. 211 R.E.2002], societies and non­ Page 8 of 14 governmental organisation registered under the Societies Act [Cap. 337 R.E. 2002] and microfinance service providers like SACCOS and community microfinance groups registered under Microfinance Act, No. 10 of 2018 and other related laws and regulations governing the conduct of businesses of banking and financial institutions. According to the foregoing laws, once a company or society is registered it becomes a body corporate by the name under which it is registered and it naturally acquires perpetual succession, have a common seal and power to own or dispose of property, to enter into contracts and institute or defend actions and other legal proceedings before courts of law. A society which is unregistered is devoid of these rights and cannot purport to exercise any of such rights in its own name. Reverting to the case at hand, it was the contention of the respondent that, it is registered and recognised by the Ngara District Council as one of the groups established by local government financial laws and thus, it has locus standi to sue and be sued. It is undoubted that, according to section 37A(1) of the Local Government Finance Act [Cap. 290 R.E. 2019], local government authorities are mandated to set aside ten percent from collection of their own sources of revenue for purposes of funding registered groups of women, youth and persons with disabilities by advancing them Page 9 of 14 with zero interests loans. Although it is not on trial court's record of evidence, the respondent in her submission claimed that, the group was registered and issued with certificate of recognition. One might assume that, since both parties admitted to have been given loans by the Council, it goes without saying that, the respondent was duly registered because according to regulation 6(1) of Kanuniza Utoajina Usimamizi wa Mikopo kwa Vikundi vya Wanawake, Vijana na Watu Wenye Uiemavu, GN No. 286 of 2019 ("the Regulations") before it was revoked by GN No. 856 of 2024, one of the criteria for a group of women, youths and persons with disabilities to be advanced loan is registration. Such registration per regulation 13(l)(a) of the Regulations is done by the social development officer of the relevant council. Nevertheless, registration of the group is one thing and right to sue as legal entity is another thing. For the respondent it was contented that, she has locus standi by virtue of Government Notice No. 217 of 2020, Financial Laws for the Local Government Authority and its Regulations, Sheria ya Huduma Ndogo za Kifedha za mwaka 2018 and Kanuni za Huduma Ndogo za Fedha (Vikundi vya Kijamii vya Huduma za Kifedha) za mwaka 2019. With due respect, this is nothing but misconception because, Government Notice No. 217 of 2020 has nothing to do with loans advances to groups of women, Page 10 of 14 youth and persons with disabilities because that GN No. 217 of 2020 concerns the Petroleum (Sokoine George Mwalingo) (Construction Approval) Notice. Likewise, Sheria ya Huduma Ndogo za Kifedha za mwaka 2018 and Kanun! za Huduma Ndogo za Fedha (Vikundi vya Kljamii vya Huduma za Kifedha) za mwaka 2019 deal with microfinance service providers specifically tier 2, non-deposit taking microfinance service providers such as individual money lenders; and tier 4, as community microfinance groups. All these are microfinance service providers registered for purpose of carrying on the business of lending money at micro levels. Unfortunately, the respondent does not fall under any of the above categories. As stated above, the respondent is a group of women and at the time when it instituted the suit before the trial court, it was regulated by Kanun! za Utoaji na Usimamizi wa M/kopo kwa Vikundi vya Wanawake, Vijana na Watu Wenye Uiemavu, GN No. 286 of 2019 ("the Regulations"). I had the opportunity of perusing the Regulations in question. There is nothing in the Regulations which provides that, once a group is registered, it becomes a legal person with the capacity to sue or be sued in its name. Conversely, Page 11 of 14 regulation 11 of the Regulations provides for remedies in case the group has failed to repay the loan. Sub-regulation (4) provides as follows: "Endapo kikundi kitashindwa kurejesha mkopo baada ya muda wa nyongeza, Mam/aka ya Serikali za Mitaa itatoa notisi kwa kikundi hicho kuhusu kusudio ia kufungua shauri ia madai dhidi ya wanakikundi". (Emphasis supplied). What is clearer from the excerpt above is that, in case any group fails to repay the loan, the local government authorities will issue notice to the group of its intention to institute a civil suit against members of the group. It is apparent that, the right to sue or be sued is available to or against the members of the group and not the group on its own name. That being the case, it is only members of the group who have the right to sue or being sued collectively. Basing on that position, the respondent on its own capacity, had no right to sue the appellant but such right is bestowed to the members of the group collectively. Thus, if the members of Ubumwe Group have any claim against the appellant, they ought to have instituted the suit as members collectively and not as Ubumwe Group which according to regulation 11(4) of the Regulations has no legal capacity to institute the suit on its own capacity. Page 12 of 14 For the foregoing reasons, the trial court erred in proceeding to hear and determine the suit on merit as legally, there was nothing for the court to determine for want of locus standi in respect of the respondent. Equally, the first appellate court fell on the same error by entertaining the appeal which had no legs to stand on. In view of this, I invoke the revisional powers vested in this Court under section 44(1) of the Magistrate Courts Act [Cap 11 RE 2019], to revise the proceedings of the trial court and I accordingly nullify them, quash and set aside the judgement and orders emanating therefrom for being premised on an incompetent suit. For similar reasons, I quash and set aside the proceedings, judgment and decree of the first appellate court for being premises on a nullity. If members of Ubumwe Women Group are still interested to sue the appellant, they should institute a suit under their personal capacity. Owing to the circumstances of the case, each party shall bear its own costs. It is accordingly ordered. I. K. BANZI JUDGE 18/02/2025 Page 13 of 14 Delivered this 18th day of February, 2025 via video link in the presence of both parties, Hon. Audax V. Kaizilege, Judge's Law Assistant and Ms. Mwashabani Bundala, RMA. Right of appeal duly explained. I. K. BANZI JUDGE 18/02/2025 Page 14 of 14