N

IN TUS CCH? OF APPEAL OP TAIfZANIA AT LAP ES SAIAAH NYALALI 9 C .J., IAPADHAHI, J .A And .LS:ALILA, J .A.) 1 TYflT. / i.'—.-ifl' --. i Ljic IL' JJ NATIDHAL HOT INS- COPLPOkTION . . .. APPELLANT LVlUNICLAL COUNCIL. . , ,,. . 1 ST RESPONDENT 2 ND., PO1EYT nSPON1JET 3. N/s .LANS AUTO ?HESS LITJTED. . 3.iJ ILESPONDENT (Appeal from the decision of the High Court of Tanzania at Arnsha (Hon. JSTICEMrJNuO) datea 22nd Harch 1995 in Civil Case No, 19 of 199 JUDGENT OF THE C OUHf NYALALI 2 C.J.: This is an appeal by the National Housing Corporation hereinafr called the Appellant aainot the judgement and decree of the High Court at Arvsha in a. onit instituted by the Appellant j oi.ntly against the kr'aaiia ifunicipal Council, one RQbort •I ira and Trans Auto Express Ltd., hereinafter refeTr to aa iiie First Respondent, the Second Respondent and Third Nespondent respectively. That omit was in respect of an alleged unlawful sale 0 f the Appellant's imrnova'ple property and sought, inter aim, the nullifica- tion of the sa1eth restoration of omership of the property and damages for loa of buoineoa reputation. Third Respondent cu.nt.er claimed for Loss of income occsioned by the Appellant's caveat which prevented the transer of the immovable property to the Third Respondent, who claims to be a bona fide purchaserb The High Court t C .4 - disnissed both the suit and the couicAaiu, The Appellant was dissatisfied with theHifh Court decision, hence this appeal. Lr. D'Souza, learned advocate, rerresented the Appellant in this apPeal, whereas hr. f. Ishi, learned advocate, represented the Second Fespondent and iIr. 1.1wale, learned advocate, represented the First and Third Respondents. Iron the roeedings both in. this Court and the High Court there is no dispute between the rarties that the Appellant, a rarastatal. body, ovais aaiay Aneavable properties in the t CI)L -± 01 Anisha and that, at the material time, the 'ppeliani wee in arrears of payaent of a substantial sum of money to the First Respondent, ieinj the balance of property tax. It is also imdisputet that in 1992, the First Respondent engaged the Second hospondent, who is an auctioneer and court broker, to ass:Let in recovering the arrears of property tax. Towai ifant end, the Second Respondent travelled to the headquartero of the Appeflan in Dar es Salasimand got some shs. 5,OOO,000/= part—payment made on that occasion. Furbhernore, there is no dispute that thereafter in December 1992, the First Fespondent nstricted the Second Respondent to eiee and sell by public auction the irnmQvable property of the Appellant situated on pldts 7 and 8, BlocA do:Liondoi, in Arsha iuiicipality > in order to recover the balance of tax in respect of varius voperties of the Apdllant, Si.i1arly nqdiute exists between the parties that on the 8th January 1993 the Second earondent sold the property concerned at aa auction condicted at plots 7 and 8 b N * 3- nentioned earlieri The highest bidder was one Zarn Zarn whose bid stood at JR. 55 nillion. The ropeiTy was hOwever not sold tohin but was sold to The Third Respondent for Shs 50 million. Aripellar± was not satisfied with the actions tsken by The first and Second Respondents and c one euently instituted this suit in the High Court and filed a caveat to block the transfer of the property to the Third Eesponcient. Arith regard to matters which are in clispate between the parties, it is the Appellanite coniention that the First Respondent was not entitled in law to sell the Appellant 1 s immovable property and that The sale conducted by the Second Respondent was unlawful iiot only because there was no legal authority for such cale but also because of irregularities in the coniact of the public auction. The case for the First kesconAeiT on The other hand is to the effect that since The AeTlant had failed to pay the arrears of property Tax inepite of appropriate demands for payment being made The liret hespondent, being an Urban Authority, was entitled to Take the action it took w i t h i n t h e scope of the Urbaa .Ththorities (Rating) Act, 1983 (Act TTo 2 of 1983). The Case for The Second Respondent is essentially that there was legal authority to seice and sell the prpperty in ducetion and that the sale by public auction was in accordance with the law. - It is part of the Second. PLespondenttc case that the property was not sold to the highest bidder but to the next ranking bidder i_n accordance with previously announced terms of the public aaction. Under those terms, the highest bidder had to deposit on the spot sash amounting to 25 of the bid, in default of rhich the property was to be sold to the next raiing bidder noon. a similar cash deposit. - The Third hespondent's case is brief and' rests essentially on the basis, that he was a hona fide purchaser for value of the property. sold to him at the public auction, after the highest bid( --er had failed to make the cash deposit as requered by the terns of the auôtjon. It is thus the contention of the Third Respondent that he acquired a good title to the roperty in question. H The most important issue iii ihJ. case upon which all other issues depend is whether the first fespondent was entitled to have the immovable prop y ha qeestion seized . and sold, The learned trial judge, tunno, J, considered this issue at length and in so doing useD ted the submissions nade by Mr. Pwaie, iseed h:eocate, to the le effect that an urban authority intending to recover ( unpaid property tax has a number of cottons under the Urban Authorities (Rating) Act 1933. those options are .: under sections 26, 29, 43 and 44 of the dst. The trial jud.ge stated, inter aim . "According to Mr. Dosa the 1s defendant ought to have sued. for the recovery pf the property tax r- in dispute under section 43 and. 44 of the Urban Authorities (hetes) Act No, 2 1983 and not :proceed . I 5— arbitrari1r:n.ier section 29 of the said tca 7?hii e I agree with tue interpretation of 'proceedings reflected above by the various cases and czi.cionary, I th:aa: the situation under the Urban Authorities (LaCing) Act Ac>, 2 cit 1983 9 is disxLn; iiishaoIe bcs:ccagj because t h e 1 cC defendant line options to recover property tax under the provisions of sections 26 29 or an44 of the said Act. The Act gives the 1 cii> defendant the flexible ocitione of recovering property taxea under section 26 or 29 or by raniaIy proceedings and 1 ci> defendant o p t e d, to, nvoke the provisions of section 29 of the Act which did not necessitate the seucia::y action stipulated under sections 43 and 44 of the Act * , • • t • * • S • •S I •I •II*•WIe .0.0. SU3 00 The provisions of sections 29 and 26 have not been dacd unconsti- tutional so the let defendant rightly invoked section 29 o recover the due property tax fron tue f plaintiff ..•'. 1 . r. D' Souza, learned advocate for the Arpellant has .1 ,. strenuously challenged the conclusion of the leainied trial judge. He has submitted be±oro us that none of '6 'I. the sections cited by the judge do authorize. out of court seizure and sale of irmovAblle iroerty for purposes : of recovery of unpaid propertytax, 1t is iart of LIr. D' Souza' s subnission to the effect Chat the course of action authorized by law is yrovided UI1tLCII sections 43 • i: or 44 both of eiiiiclt involve using the Court, I: le rrepose Co closely examine the prdvisions of sections. 26, 29, 43 and 44 of the Act. ha so doing, we s1iall deal with section 29 last, S12ii ic c> the cectlil 4 I :' •,,:•• 6 - which the lëaned trial judge found to have been correctly acted upon Tby the Fisst despondent iii having the premises on plot Nos. 7 and 3 seized and sold hy the Second Respondent. We begin with section 26 shich states: (i ) If any person fails to ay any rates disc to be paid by h:h:.L, the z:tLng e;sthorit nay cause a demand in writin g to be made upon such person, requiring him tO say the amount due within four- teen days of theddate of nash demand, If, after such demand, such enson fails to pay.sucxi swa, it eIilaLJ Ce lawful for the Director of The. rating authority, upon a resolution 0f the rating authority in that behalf, to issue a warrant to the court broker requiring him to distrain -aeon the personal goods and chatteJs as such person to thevaIue of such whether or not such goods and chattels be foand i'pon 6red ''i :Eh respect of w±ch:the rates s:.e due. Provided that such warrant shall not be issued unless the :aatfce referred to in sub—section (1) was served personally upon saCil person, or was left at. his normal alacc of work or residence or at his rjettred office. botwihstanding anythiLlg contained in s—seotion (2), the rating ai.rtthority nay,at its:disretiofl, recover the sun due from any person by civil action without rthr notice or6asmid0" It is apparent imder the provisions of section 26, articu1arly the parts wc have su.lder:Lined, that there are two courses of 3ction provided under the section for recovery of unaid property tax which must however be le Act.. The first course takes, place rates levied under Uh out of court an.& invoive the Director of the rating 4u authority iaauinga disress warrant to a court broker ii - 9 after a 1ritte:i deisand notice h.as been made and on the basis of a resolution 1 of the rating authority. However, it is clear that only property in the narire of uovable property maybe attaQhed by the court broder. The second course of action is stated under sub—section (3) and involves filing a civil suit in Courts That being the position, it, is clear that the ; action talçen by the Aiisha hunicipal Council does not lie within .1 the scope of the provisions of section 26. Let us see if it, lies within the provisions of section 43 of the.Act. That section states: "(1) If after the time fixed i or the paimen -b of any rate, any person'fails to pay any rate due by him, it shall be coriretent for the local authority to cause a rrinted or written demand to be made u;ron such person to pay the amovantu statedin such demand within fourteen days after service thereof. Where any person who shall have had.such demand delivered to him ereomall• )7- or left at his ordinary place of residence or place of business or office shall irite default, it shall be competent for the local authority to apply als. dastrate having jurisdicti on ii thin the local authority for a stmm,ary warrant in the form contained in the Third tchcclule to this Aàt to recover such rates from the person liable to pay the sse which warrant such magistrate shall grant on production of a list of the names and addresses of the erc.ons so in default, and the amourt due b y them, with a certificate by the Director or Township I'ecutive dfficer as the case cay be, that they have been severally recuired to ra:e paiaent of the said rates by notice as aforesaid, and do not exceed the rates fixed by or under this. ct; and every such - warrant shall contain every authority and be executed in all respects as though it Werm both a warrant of attacluient and a warrant of sale issued out of the Court cf, such magistrate. 1 1 -8-- (2) Anything in he J'Iagistrate Courts Act, 1963 to the contrary notwithstand:La - :, a District 1agistrate shall IJe deened to have jurisdic- tion to issue warraats under this section. The Third Cchcduie referred to under section 43 is a Su.mmary 7arrant of Attachment and Tai•o cormanding a Court Broker to attaci and hold movabLe IoI)_rty of the debtor and 'authorizing the sale by pvbiic suction of such prporty after due notice and srociamatin of sale unless the debtor pa the unpaid rate' together with consequentj interest and costs. It is apparent that the rroceedings or course of action prescribed under section t3read together with the Third Schedule of the Act do not apply to immovable property. It follovrs therefore ±hat the course of action taken by the First ,,Lespondemt aies om" i'ae the scope of seOtion 43. What about the p±ovisions of section 44 which states: 11 (1) Notwithstanding the provisions of the last preceding sectioa, the locaL authority may at its discretion, after the time fixed for the payment of any such rmes as afore- said, recover from the person in default (ijthout furbher notice 'or demand) the amount of the rates due by ouch person, irrespective of the asountthereo'f 5 'by z me cotut 0± te of the taret class flaying jurl'saic'Gioll within the area of the local authority, whether the person liable forthe same shall be resident • srithan the jurisdiction of such court or nbt. Tn case it shall not be poositto to effect eervice of vaioons wthan coarb as aforesaid, • then such service OAaJJ be echected n anon niarner as the said court rfs,.Al direct. (2) Anhing in the ha srratec'Oeurts Act, 1963 to the 'contrary notv,rithstajid:n, a District agistrate shall be deemed tt have jurisdic tion to hear and determine clahis for the recovery of rates under this section." $ ( - - The neaning of these provisions i.e oThvious, and it is to the effact that a local authorit:j which gives a printed or wrjmten d.emand pursuan to the rovisons 01 sub—section (1) of section 43 is not precluded from taking nomal le'al action iii court to recover the unpaid rate. It is apparent that the cotrse of action piescribed under section 44 is 51 action ,magistratec court of competent jurisdiction for recôve . the a:nount of the rates due, by such person. That action can betahen bp a Loca] authority instead of acting under section 43 Section 44 however does not say anything abQut action for the sale of the premises in respect of which the rates are due. Thi-s means that th& course of action baJama Pp the Pirst Respondent in having the premises on 1ots Nos 7 and 8 seized and sold by the Second IesrorSent is not within the scope of section 44 Let us now tuii to the provisions of section 29 which read em follows: ri(i) If t1e amount of a general or special rate ax any instalment thereof payable n respect of any premises i.c not eaed within sixty days ±rOei the name men • it was due, the Council shall cause to be fixed on a conspicuous ran of the emises a xotice in the form -prescribed k the Minister to the effect e am. o"4 tf the rate payable in respect of the premises is not paid within twenty one days 2 proceedings will 'e taken for the sale the • Premiaes for tbe poses of defraying uch aoui2t any erson,'biaiming io be the owner of any aseessed 'ethies ha r;ivon notice to the, Cci f Jbis name and )ostal S ( - 10 - address no notice as aforesaid shall be affixed on such prenises until a demand in writing for pac:ent of the rate due thereon has been sent by registered letter by the Council to such person, and default haa been made for one month after the date of posting the registered letter. It is apparent that section 29, libe sections 26, 43 and 44 concei -i the recovery of unpaid rates levied on property tax. icr purposes of section 29, the rie may be general, 0 which is defined under section 18(2) as being, "rate made and levied over the whole area within the jurisdiction of the Council for the general purposesC3f the Council", or pecial, which is defined under section 1(,, (2) as being, "a rate made and levied over a specifitci area within the jurisdiction of the 0wicil for the purpose of a specified project approved. by the Council for that area." On a proper constiuctin or interpretation of the provisions of section 29, it seems clear: that- iher provide for a course of action directed at the sale ctjDrcuisoe for the purposes of recovering the amount of rates due for ranaent in respect of such premises. The circumsduzces which iLSke this course of action availa1le are: (: ) a period..sf sixty days cir empire after ohs rates*ave ecomc due tow :paiment in respect gf such prOIJeriy (ii) a notice by the Council in a tore. prescribed by the hinie;ter has been fixed oil a onspicuous place du the prezijisQa fQr a period of twenty one days to the effect that the premises will be $old to recover the rates due in res of the premises if the rates are not paj.d within such period of twenty ne daysyo Q & e (iii) a failure to pay th ue atee mithin the period of twenty one daye etated in such no.ce. it is also apparent from the provisions of sub- section (2) that where the person claiming ownership of asesed premises has notified the Council of his or her name and postal addrsss, the Council is prohibited from afl.xing the demand n.tice on the premises until after a demand letter was snt tg such person by r.gistered post. Purthexv.re it is apparent that the course of action for the saJe f the premisee concerned has to be the end result of r mimgs. The important question here is what does the ,xprQ z,,~ I~q ij proceedings in section 29 moan? Mr. DSQuza, learned advocate for the Appellant, cited a number of Daglish cases both in the High Court and before us T1se cases in.luded the case of HOCPvCATHCART (1894) 3 37 SOCIET Vr (1956) 2 LtJ ER 65 and V CRNv VAUHA1j..(1.937)4ALLER'249. Unfortunately all .t1tse casQq, involve statute; which do not concern actions by 11 authorities for - 1e purD oses o recovering unpaid ralep , He alo cited in the High Court th - Concise Oxford E4g],ish Dictionary 4t1j Edition a& to the ordinary meaning - ! of th cr9 in cjuesin Tha ditions.ry meaning is 'legal steps, ste p s takèn iii legal a44joa q a shall institute • l?,T: :jS (go to law)à". V. • I seems to ug that .-bhié menirig given in the Concise Oxfd 1Dictinary is Qosist?flt rilh the meaning given inLACh. Lkf DICTIONARY, .6th .dition concerning the vo'd 2 ?$oesm'i, Tt 1$ stated C • 4% ( , - 12 - "In a general sense the form and maimer of 'conducting juridical business before a court or. judicial officer, Regular and orderly progress in form of law, including all possible steps in an action from its commencement to the execution of judgement. Term also refers to ad.inistrative proceed- ings before agencies, tribunals, bureaus, or the like..." There is further consistency with the- meahing of the expre-s.&io Lgal Preed.ings' stated in BLACK' S LAW DtCTIONARY as "Term includes all proceedings authorized. " J or, sanctioned by law, and brought or instituted in a court of law or legal tribunal, for the acquiring of .a right or the enforceniet of a remedy'. We are of the considered opinion that in the light of what i stated both in the Concise Oxford English Dictionary and BLACK 1 s LAW DIC-TIONkaY, the proceedings envisaged under section 29(1) for the recovery of unpaid ±'ates, are, legal proceedings and that the basis or cause of action for such legal proceedings are the circumstances within the scope of sub—sections (1) and (2) of section 29 which we have already explained. * The question wh'ich arises is in which fonim are the pradi.ngs for thesale of.premises.to be instituted. We thihk that in view of the scheme of the ConstitutiOn of the UnitedRepublic of Tanzania as explained in the case of AIPTOMNEY—GENFILU 1) LOHAY AKONAAY and (2) JOSEPHLOHAY, 'decided by this Court in Civil Appeal No._3 of 1994 (1995) 2 LRC399 the forwa rs be the Court of law s since there is.iio express provision creating a different C Si T m I - 13 - forun under the Urban AuthorIties (Rating) Act, 1983. It follows therefore that the coure of action taken by the First Respoi4ent in acting ut of court by instructing the Second Respondent to seize and sell the premiss in question fail outside the provisions of section 29 and was therefore unlawfulb The answer to the first issue before.u must therefore be that the First Respondent Was not entitled to have the premises seized and sold by the Second Respondents - For purposes of clarity we need to ethphasie here that had the First respondexit, that is, the Arusha 1micipa1 Council, followed the procedürewe iave explained earlier, involving the fixing of a prescribed notice on a conspicuous place on the premises concerning the rates due on such premises, it would have been entitled to have the premises sold as a consequence of proceedings instituted in a court of competent uriôthction The second issue for consideration and decision is a simple one, and it is whether the sale of the premises conducted by Second Respondent, was lawful. Obviously since the First Respondent was not entitled to have the premises sold, it must follow that the sale was unlawful., regardlesa of the maimer in which the public auction was g conducted. The third issue in this base is whether the Third Respondent acquired ary title to the premises purportedly sold to him as a boia fide purchaser for value. The answer I 14 T here is obviousi. Since the Second espondeht purported to sell to the Third 7Lspodent the premises in question on beha'f of the First I?.esondent, and sinco the First Respondent was not entitled to sell those premises, there was no title which could in law :pass to the Third Respondent. The final issue in this case is a consequential one, and this coflcerns the reliefs to üch the parties are entitled. Obviously the jugement and decree of the High Court have to be, reverseth But Is the Appellant entitled to all the reliefs sought in, the hIgh ourt? In the plaint filed iA the High Court, the Appellant sought judgement as. follows: as against all defendants, an order declaring the auction held. on 8.1.93 illegal;, • (it) as against let defendant and 2nd defendant jointly and eeverally, an order for damages • for loss of business reputation in the sum of Shs., .50 7 000, 0O/; (ii) as against all defendants, a declaration that the proeerty held under Title • • 5019/32 is still plaintiff's property; cl as against 2nd. defendant the eui of Shs. 1,269,942/20 plus interest thereon at he coi2iiiercial rate of 31 per annum from 23.10.92 to date of judgeme.t; interest on the decretal amount at court rate from date of judgement to payment in full; any other or fuhr relief as the Court • deems fit. We have found no problem with the reliefs sought under item (i), (ili) 9 (v) and. (vi) and this Court will • •t. •• • - ( —15- grant them. There are however proble:s concerning the reliefs sought under items (ii) and (iv). Let us start with the relief under item (ii). According to the evidence adduced at the trial, the Plaintiff, who is the present Appellant , claimed to have suffered loss of business reputation as a result of the action taken by the Pirt and Second iespondents in unlawfully seizing and selling Plaintiffs premises by • public auction, We fail to see• the basis of this claim. Undoubtedly, the First and Second Respondents took a wrong course of action, but the tiuth remains that the Appellant was in substantial arrears.of payment. of property tax to the First Respondent. It is our considered opinion that since the First Respondent was entitled to take legal action against the Appellant, there is no justification for the Appellant to complain about loss of business reputation, if there was any. As to the relief sought under item (iv) it is apparent from the evidence adduced at the trial and the leadings, specifically paragraph 9 of the Plaint and the evidence of Robert Makao (Pwi) and the Second Respondent' (D.W.2) that the sum of Shs. 1,269,942/20 was paid by the. Appellant to the Second Respondent as Court brokers charges when the latter visited the headquarters of the Appellant in Dares—Salaam on a debt collection errand in October. 1992. • This was well before the seizure and purported sale- of the premises concerned-. Since the payment of these