Land Appeal No

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA IN THE SUB-REGISTRY OF MTWARA AT MTWARA LAND APPEAL NO. 27079 OF 2023 (Originating from Land Application No. 48/2021, the decision of the District Land and Housing Tribunal for Mtwara at Mtwara) MONSIAPILE AGAPTO KAJIMBWA.................................................... APPELLANT VERSUS ADELA KILINDO MKANDETI.................................................... 1st RESPONDENT NMB BANK PLC......................................................................... 2nd RESPONDENT JUDGMENT 20h June & 17” July, 2024 MPAZE, J.: The dispute in this appeal revolves around the certificate of title for the house located at Plot No. 64, Block "A", Mangowela Area within Mtwara Municipality, registered in the name of Monsiapile Agapto Kajimbwa. This certificate was used to guarantee a loan of Tshs. 7,000,000/= from the 2nd respondent, NMB Bank Pic, for business purposes, taken by the 1st respondent, Adela Kilindo Mkandeti. The loan was repayable in 12 instalments of Tshs. 651,796.42/= each month, to be completed in 2020. i Lazaro Agapto Kajimbwa, the now-deceased husband of the 1st respondent, acted as the guarantor for the loan by depositing the title deed as collateral. The title deed was in the name of Monsiapile Agapto Kajimbwa. Due to discrepancies between the names on the certificate of title and the guarantor's voter ID, the guarantor submitted an affidavit dated 5th March 2020 to the 2nd respondent to confirm that all the names were his. This led to the guarantor being recognized and accepted by the 2nd respondent, affirming that the names on both the voter ID and the title deed belonged to him, thus continuing the loan process. In April 2021, the guarantor passed away. Following the funeral, a family meeting was called to determine if the deceased had any outstanding debts. During this meeting, the 1st respondent informed the appellant, Monsiapile Agapto Kajibwa, that the house had been used to secure a loan from NMB Bank and they were unable to repay it. Upon receiving this information, the appellant conducted an official search at the land offices in Mtwara and confirmed that his house was mortgaged to the 2nd respondent as collateral. After verifying this, he issued a demand note to the 2nd respondent requesting the return of his title deed. 2 Nonetheless, the 2nd respondent did not comply. Consequently, the appellant decided to file a suit against both respondents, jointly and severally, in the District Land and Housing Tribunal (from now on the DLHT) for Mtwara through Application No. 48 of 2021, seeking the following reliefs; 1. A declaratory order that the suit property belongs to the appellant. 2. A declaratory order that the 1st respondent trespassed on the appellant's Certificate of Title No. 16639 MTWLR and unlawfully mortgaged it to the 2nd respondent. 3. A declaratory order that the 2nd respondent was negligent by granting a loan to the 1st respondent without the consent of the true certificate of title holder. 4. Order to be paid by the respondents a compensation of Tshs. 28,325,000/= as specific damages. 5. The 2nd respondent is ordered to release and hand over the certificate of title to the appellant with no conditions. 6. General damages to the tune of Tshs. 25,000,000/=. 7. Cost of the suit 8. Any other reliefs the Honorable Tribunal deemed fit to grant. 3 The District Land and Housing Tribunal (DLHT), having heard the application from both parties, reached the decision that the appellant is the lawful owner of the disputed land, Plot No. 64, Block "A" located at Mangowela, Mtwara Municipality. It also ordered the 2nd respondent to hand over all documents related to the disputed ownership of the plot to the appellant. The DLHT further stated that since the dispute was caused by Lazaro Agapto Kajimbwa, who submitted a false affidavit, and considering that Lazaro Agapto Kajimbwa is now deceased, there would be no order as to costs. Each party was ordered to bear its own costs in the application. Despite being partly successful, the appellant was dissatisfied with the remaining part of the DLHT's decision. His wish was to achieve all that he was claiming at the tribunal. As such, he brought this appeal with six grounds of appeal as follows; 1. That the trial tribunal erred in fact and law for holding that the 2nd respondent loaned Tshs. 7,000,000/= to the 1st respondent in total compliance with the law. 4 2. That the trial tribunal erred in fact and law for not finding that the 2nd respondent was negligent by giving a loan to the 1st respondent banking on the affidavit which is prima facie tainted with untruthful facts. 3. That, the trial tribunal erred in fact and law for denying costs to the appellant on unjustified reasons. 4. That the tribunal erred in fact and law for denying the specific damages to the appellant without giving reasons. 5. That, the trial tribunal erred in fact and law for denying general damages to the appellant without giving reasons. 6. That the trial tribunal erred in fact and law for failure to find that the 1st respondent trespassed upon the title belonging to the appellant and consequently mortgaged it to the 2nd respondent without the consent of the title owner. Based on these grounds of appeal, the appellant prayed to the court for the following orders; i. A declaration that the 2nd respondent was negligent in facilitating a fraud loan to the 1st respondent. ii. An order awarding costs of the suit to the appellant. 5 iii. An order awarding specific damages to the appellant as pleaded in the suit. iv. An order awarding general damages to the appellant in the suit. The appeal was heard through the filing of written submissions. The appellant was represented by Dr. Ashery Fred lltamwa, the learned advocate, while the 2nd respondent was represented by Ms. Tabitha Raymond Ndumbalo, the learned advocate. Unfortunately, the 1st respondent did not file a submission, so the matter proceeded ex parte on her side. The court, having received the written submissions from the parties, scheduled a date for judgment. However, while composing the judgment, questions arose in my mind regarding whether the guarantor was supposed to be a necessary party to this matter through his legal representative and whether there were issues of fraud. These questions prompted me to vacate the order for judgment and instead schedule a hearing date for the parties to address the court on these two issues. On 26th June, 2024 Mr. Emmanuel Ngongi, learned advocate, appeared for the 2nd respondent, while Ms. Jenifer Kivuyo, the learned advocate, 6 appeared for the appellant on behalf of Dr. Ashery Utamwa, learned advocate. The 1st respondent again did not appear. The parties were invited to address the court on whether the guarantor was supposed to be joined as a necessary party through his legal representative to the case and whether there was any element of fraud. Both counsel requested to address these issues by way of filing written submissions, which the court allowed, granting them seven days to file their submissions. I thank both parties for complying with this order, leading to this judgment. I have carefully examined the submissions from both sides. Starting with the submissions filed by Dr. Utamwa for the appellant, he straightforwardly argued that the guarantor was not supposed to be a necessary party to the matter. He explained that for a party to be deemed necessary, there must be a right of relief against such a party concerning the matters involved in the suit, and the court must not be able to pass an effective decree in the absence of such a party. To support this position, he cited the Indian case of Deputy Commissioner, Hardoi v. Rama Krishna, 1953, which was quoted in the 7 case of Kenneth Anselumu Nshushi v. Nashon William Sabibi, Misc Land Appeal No. 47 of 2022, HC Kigoma. Dr. Utamwa argued that the two tests do not apply to the case at hand since the appellant was not claiming any relief against the guarantor. He added that even a decree which will be passed from this appeal could be executed in the absence of the guarantor since the appellant seeks, inter alia, a declaration that the Bank was negligent in offering a loan to the 1st respondent based on a guaranteed security for the loan given by a purported guarantor, without first exercising due diligence to verify if the said security was safe, valid, and in consonance with the information provided by the applicant (1st respondent). On the other hand, counsel for the 2nd respondent submitted that, given the nature of the claim, the guarantor was supposed to be joined as a necessary party. The counsel argued that there is no dispute that the 1st respondent obtained a loan of Tshs. 7,000,000/= from the 2nd respondent, and that this loan was secured by a title deed guaranteed by Lazaro Agapto Kajimbwa, who entered into a Bank guarantee agreement with the 2nd respondent as a guarantor for the 1st respondent. 8 Mr. Ngongi submitted that although the guarantor is deceased, and as there is evidence from the appellant stating that he provided the title deed to Lazaro Agapto Kajimbwa who is now not present and has no one to speak on his behalf, to know the truth at least on how they handed over the title to each other and as the deceased had an agreement with the Bank, his estate administrator should have been joined as a party to the case as the main complaint centres on the mortgaged title. Mr. Ngongi emphasized that considering the application filed in the DLHT, especially paragraphs 6 (a) (ii) (iii) and (iv) and paragraphs 7 (b) and (c), the applicant pleaded on the issue of the loan. Therefore, Mr. Ngongi contended that the issue of the loan cannot be dealt with without considering the status of the guarantee agreement entered into between the guarantor and the 2nd respondent. The counsel added that a guarantee agreement is a separate agreement entered into between the Bank and the guarantor of the loan. It has essential elements of a valid contract, assuring the Bank to issue a loan to the applicant and, upon failure, allowing the Bank to recover its money by selling the mortgaged property. 9 To bolster his submission on this point, Mr. Ngongi referred to the case of Juliana Francis Mkwabi v. Lawrent Chimwaqa, Civil Appeal No. 531 of 2020, CAT, where it was held; 'a party who, being closely connected to a lawsuit should be included in the case if feasible, but whose absence will not require dismissal of the proceedings.’ Another case referred to by the counsel is Tang Gas Distribution Limited v. Mohamed Salim Said & 2 others, Civil Application No. 68 of 2011, CAT. In this submission, counsel for the 2nd respondent argued that the court should find that failure to join a necessary party is fatal, urging this court to consider the decision in Tang Gas Distribution Limited (supra), which nullified the proceedings and the judgment of the trial court for being fatal due to the failure to join a necessary party. Before proceeding to consider what the parties have submitted regarding the second issue, which I invited the parties to address, I find it necessary to pause here and explain why I found it fit to have the parties address this issue. io As mentioned earlier, during the process of composing the judgment in this case, the question of whether the guarantor was supposed to be a necessary party or not came to mind. This issue arose after carefully reading the claim in Land Application No. 48 of 2021, the evidence presented therein, and the decisions made after hearing the matter. Starting with what the claim in the DLHT entailed, I have already outlined the claims to some extent above. In addition to those claims, paragraphs 6 (a) (i) to (vii) of the application outlined the cause of action. For example, paragraphs 6 (a) (ii) to (iv) state; (ii) That the applicant's cause of action against the 1st respondent is unlawful trespass and possession of the Right of Occupancy as mentioned above, and without consent of the applicant she mortgaged the same to the 2nd respondent in consideration of a loan amounting to Tshs. 7,000,000/=. (iii) That the applicant's cause of action against the 2nd respondent is collusion with the 1st respondent in using the above said Right of Occupancy in a loan contract between them without the knowledge or consent of the Applicant, the true owner. ii (iv) That, in February, the 1st Respondent unlawfully and without any colour of right, or the applicant's consent, took hold of the Applicant's Right of Occupancy unlawfully and surrendered it to the 2nd respondent in consideration of securing a loan amounting to Tshs. 7,000,000/=. The evidence provided in the DLHT to support these claims included the appellant's testimony as PW1. The appellant testified as follows; "... the core issue of the dispute before this tribunal is about who owns the house located on Plot No. 64, Block "A"in the Mangoweia area, Kajimbwa Street, within Mtwara Municipality. The first respondent used my title deed to obtain a loan from NMB Bank. The second respondent did not adequately verify the rightful owner of the plot and house. They failed to conduct sufficient due diligence on the loan applicant and guarantor, who is not the owner of the house on the plot in question....Because I was transferred, I began selling the plot located in the Police area, and I sold a house that was a lodge. During this process, I involved my younger brother, leaving him the title deed and the plot and houses in the Police area. At that time, Block "A "did not have a title deed. I told my brother to take and keep it..." 12 PW1 also tendered the Equitable Mortgage Form No. 004, executed by an instrument dated 22/02/2021, between Monsiapile Agapto Kajimbwa and NMB Bank PLC, which was received as Exhibit P4. The 1st respondent acknowledged obtaining a loan from the 2nd respondent and stated that her late husband secured the loan by using the appellant's title deed. The 2nd respondent stated that they provided a loan to the 1st respondent, who was guaranteed by her late husband by depositing the title deed in the name of Monsiapile Agapto Kajimbwa. The guarantor, now deceased, had sworn an affidavit confirming that both names, Monsiapile Agapto Kajimbwa and Lazaro Agapto Kajimbwa, were his. This affidavit was admitted as Exhibit D2. Based on the claim and the reliefs sought by the applicant as shown above and the evidence presented in the tribunal, the question is whether the guarantor should have been joined as a necessary party through his legal representative. Section 3 of the Civil Procedure Code Cap 33 R.E 2019 defines a legal representative as; 13 '/I person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sue or is sued in a representative character, the person on whom the estate devolves on the death of the party so suing or sued.' Starting with the claim and reliefs as shown above, it is noted that the appellant first complained that his title deed for Plot No. 64, Block "A" was trespassed upon by the 1st respondent and requested the DLHT to declare that the 1st respondent trespassed on the appellant's Certificate of Title No. 16639 MTWLR and unlawfully used it as collateral with the 2nd respondent. When I examined the application at the DLHT, the reliefs sought about this claim, and the evidence provided, I noted that, according to the claim, the person alleged to have mortgaged the disputed title was the 1st respondent. However, according to the evidence provided, especially considering Exhibit P4, which the applicant/appellant tendered during his testimony in the DLHT, it shows that the person who mortgaged that title was Lazaro Agapto Kajimbwa, who also identified himself to the 2nd respondent as Monsiapile Agapto Kajimbwa. 14 Further, in his testimony as PW1, the appellant stated that when he moved from Mtwara, he left his younger brother, who was the guarantor, to follow up on the issuance of the title deed for that plot, which had not yet been issued. With the guarantor now absent, who can speak to these matters if this is indeed what happened? Besides, based on the evidence offered during the trial, it is not true that the 1st respondent mortgaged the title deed; it was the guarantor who did so, as evidenced by the affidavit confirming that the names on the right of occupancy belonged to him. This situation led to two agreements: the first between the Bank (2nd respondent) and the borrower (1st respondent), and the second between the Bank and the guarantor. It was stated in the case of Austack Alphonce Mushi v. Bank of Africa Tanzania Limited & Another, Civil Appeal No. 373 of 2020, that even if the beneficiary might be the same in a loan agreement if there are both a loan agreement and a mortgaged agreement, these are two distinct contracts. This point was also emphasized by Mr. Ngongi, the advocate, in his submission. He stated that a guarantee agreement is a separate contract 15 between the guarantor and the Bank, distinct from the loan agreement, which is between the borrower and the Bank. Therefore, a guarantor was a necessary party to this matter according to Mr. Ngongi advocate. Additionally, looking at the claims and the DLHT's decision, the appellant sought the return of the title deed along with costs. The title was requested to be returned even if it had been mistakenly mortgaged. The party who mortgaged it should have been included as a party, and the costs requested were due to the person who misused the appellant's title deed who in this case is a guarantor who was not joined. My brother Matuma J, in the case of Kaliwabo General Traders Limited v. National Microfinance (NMB) PLC & Another Land Case No. 10 of 2021 HC said; 'If the parties to the loan agreement are not parties to the Mortgage Agreement, they are restricted to the duties and responsibilities in the loan agreement and not those in the mortgage agreement even if they benefited from such mortgage agreement.' Considering the claims before me, which stem from the appellant's title deed being used as a mortgage, it is evident that the guarantor was 16 inevitably a necessary party. Based on the evidence presented, the guarantor was the one who guaranteed the 1st respondent using the disputed title deed. I commend both parties for their submissions regarding who is a necessary party. They have comprehensively covered the matter, and I find no need to reiterate their points. Given their understanding, I emphasize that in this case, a guarantor ought to have been joined as a necessary party through his legal representative, as he committed by guaranteeing the said title deed as a mortgage. In addition to assessing that the guarantor was a necessary party who ought to be represented by his legal representative, I proceeded to delve deeper into these claims as lodged in the DLHT, including the formulated issues concerning the claim. I have done so with the understanding that this is the first appellate court, which has the duty to evaluate, analyze, and scrutinize the evidence presented in the trial court (DLHT) and arrive at different decisions where necessary. 17 I have considered the alleged cause of action and some of the issues framed by the DLHT, which are who the rightful owner of the disputed land was and whether the 1st respondent trespassed on the disputed land using invalid ownership documents to obtain a loan from the 2nd respondent. These two issues as framed aimed to address whether there was a trespass on the applicant's land. Discerning from formulated issues, the question will be does the cause of action against the 1st respondent coupled with the evidence presented, potentially amounts to trespass to land? or can we truly assert that the act of mortgaging a certificate of title itself constitutes trespass to land? Generally, trespass can be defined as an unjustifiable physical interference with land in possession of one party by another, meaning that the person interfering must have entered that land. Defining what amounts to trespass the case of Frank Safari Mchuma v. Shaibu Ally Shemndolwa [1998] TLR 280 on page 288 had this to say; 'By definition, trespass to land is unjustifiable intrusion by one person upon the land in the possession of another. It has therefore been stated with a light touch that: "If the defendant places a part of his 18 foot on the plaintiffs land unlawfully, it is in law as much a trespass as if he had walked half a mile in it.' Therefore, trespass occurs when a person directly enters another's land without the permission of the owner. If there is no entrance to the land, a claim of trespass to land cannot stand. See also cases of Avit Thadeus Massawe vs Isdory Assenqa Civil Appeal No. 6 of 2017 (unreported), Jela Kalinqa vs Omari Karumwana [1991] T.L.R. 67 Geita Gold Mining Limited v. Twalib Ismail & 3 others, Civil Appeal No. 103 of 2019 and Grace Olutu Martin v. Ami Ramadhani Mpungwe & Another, Civil Appeal No 91 of 2020. Guided by the authorities above and having examined what was complained of and the evidence adduced in the DLHT, I have realized that the DLHT itself misframed the issues for determination. For example, the issues of who the rightful owner of the disputed land was and whether the 1st respondent trespassed on the disputed land using invalid ownership documents to obtain a loan from the 2nd respondent did not deserve to be issues for determination due to the following reasons; 19 Firstly, looking at the particulars of the cause of action the same did not amount to trespass to land. Secondly, based on the evidence presented by the appellant, nowhere was it proven that the 1st respondent entered or encroached upon his land. His complaint was solely about the 1st respondent using his ownership documents to secure a loan from the 2nd respondent. This complaint, according to what constitutes trespass to land, cannot prevail. Even though the cause of action against the 1st respondent for trespass did not hold, the appellant's other claim against the 2nd respondent was that they colluded with the 1st respondent in using his right of occupancy to obtain a loan, he went further claiming that the 2nd respondent was negligent in issuing the said loan without doing due diligence. The DLHT thoroughly discussed the issue of negligence and concluded that the 2nd respondent was not negligent, having conducted due diligence by providing the loan to the 1st respondent only after receiving the affidavit of names (Exhibit D2) from the guarantor. In light of this, I see no reason to differ with these findings. 20 Regarding the other complaints by the appellant, particularly the tribunal's failure to award specific damages, costs, and general damages, I concur with the DLHT. The appellant failed to substantiate the claim for specific damages with evidence. Furthermore, as the DLHT rightly noted, any costs incurred by the appellant were caused by the guarantor, who was not a party to the case through his legal representative. Therefore, this complaint also lacks merit. Considering all these points, and since I have identified the root of the entire dispute as stemming from the appellant's title deed being used as collateral, secured by the guarantor who is now deceased, it is clear why his legal representative should have been a necessary party. Using a document itself to secure a loan does not constitute trespass, and even if using that document to obtain a loan would imply trespass, the question would be whether the 1st respondent was the one who mortgaged that document to obtain the loan, in which the answer would have been in negative. Based on the discussion, if I had found that the only issue, in this case, was the failure to join a necessary party vide his legal representative, I might 21 have directed the case to be remitted to the DLHT to allow for the joinder of the necessary party and the case to be tried denovo. However, since I have determined that the cause of action against the 1st respondent did not amount to trespass to land and that the 2nd respondent was not negligent, I hesitate to issue such an order as the cause of action in Application No 48 of 2021 against the 1st respondent did not amount to trespass, consequently, I find this appeal to be without merit and thus proceed to dismiss it, with each party to bear his own costs. It is so ordered ' c Dated at Mtwara this 17th July 2024. Judge Court: Judgment delivered in the presence of Mr Emmanuel Ngongi for the 2nd Respondent Jenifer Kivuyo learned advocate holding brief of Mr. Utamwa for the appellant. M.B. Mpaze Judge 17/7/2024