national microfinance bank nmb vs levison yohana kiula administrator of the estate of the late levison john kiula 2023 tzhc 19699 1 july 2023

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (IRINGA SUB REGISTRY) AT IRINGA CIVIL APPEAL NO. 12 OF 2022 (Original Civil Case No. 9/2021 of the District Court of Iringa before Hon. E. A. Nsangaiufu, SRM.) NATIONAL MICROFINANCE BANK(NMB)PLC ............................................... APPELLANT VERSUS LEVISON YOHANA KIULA (Administrator of the estate of the late Levison John Kiula) ............................................ RESPONDENT JUDGMENT 2Jd May & 1st August, 2023 I.C. MUG ETA, J: The late Levison John Kiula was a primary school teacher and operated account No. 51602401856 with the appellant. He took a loan facility of Tshs. 840,000/= at 25% interest per month from Zanziba & Nyihita Co. Ltd on 20/6/2019 and kept his salary as the loan security surrendering his ATM card to the lender. It was a six months term loan as stated in exhibit DI, the loan agreement. He died on 17/8/2019. His estate administrator, in the course of performing his duties, visited the appellant and requested a bank statement of the deceased's account to ascertain the amount of money in the account. From the bank statement, he realized Page 1 of 12 that there were money transactions debited from the deceased's account after his death. He issued a demand notice to the appellant claiming the debited money amounting to Tshs. 712,830/=. The appellant denied liability as the deceased had given his ATM card and credentials to a third party, Zanziba & Nyihita Co. Ltd. This contention led to the filing of a suit against the appellant before the trial court. The trial court was convinced that the micro credit facility was an agent of the appellant which made her liable. It ordered the appellant to pay Tshs. 1,026,168.18/= as specific damages, Tshs. 5,000,000/= as general damages and the principal sum of Tshs. 1,026,168.18/= and costs of the suit. Aggrieved, the appellant filed the present appeal based on eight grounds, namely: 1. That the honorable trial court erred in law in entertaining an incompetent suit. 2. That the honorable trial magistrate erred in law and facts in holding that the appellant breached the duty of banker customer relationship. 3. That the honorable trial magistrate erred in law and facts by failure to decide that the withdraw of money was done by Page 2 of 12 agreement between the deceased and the third party the act which the administrator cannot challenge. 4. That the trial magistrate erred in law and facts when shifted the burden ofproof from the respondent to the appellant. 5. That the trial magistrate erred in law and facts in basing her decision on the agent and principal relationship which was not pleaded in the plaint and in issues framed. 6. That the trial magistrate erred in law and fact in awarding Tshs. 1,026.168.18 as specific damages and principal sum while it was not pleaded and proved. 7. That the trial magistrate improperly and injudiciously exercised its discretional power of awarding general damages of Tshs. 5,000,000/= to the respondent. 8. That the trial magistrate failed to analyze the evidence. The appeal was argued by way of filing written submissions. The appellant was represented by Baraka Mbwilo, learned advocate whereas the respondent enjoyed the legal services of Emmanuel Chengula, learned advocate. Page 3 of 12 In his submission in chief, the appellant's advocate raised a new ground of appeal that the court had no jurisdiction to entertain the dispute between the parties. I will not discuss this ground as leave was not sought by the appellant to add a supplementary ground of appeal. On the 1st ground of appeal, the learned advocate faulted the respondent's plaint. He submitted that the plaint was improperly verified as there was no verification for paragraph 11 which states the value of the subject matter and the jurisdiction of the court. Further, that the plaint failed to state the cause of action against the appellant, value of the subject matter for purposes of jurisdiction and court fees. This contravened Order VII Rule 1(e) on cause of action and Order VI Rule 15(2) of the Civil Procedure Code [Cap. 33 R.E 2019]. To buttress his submission, he cited the case of Fereji Said Fereji v. Juluma General Supplies Limited & Another, Land Case No. 86/2020, High Court (Land Division) - Dar es Salaam (unreported). He argued further, that the plaint failed to disclose which facts are based on his own knowledge and those based on his belief. To support his argument, he cited the case of Anatol Peter Rwebangira v. The Principal Secretary, Ministry of Defence and National Service & Page 4 of 12 Another, Civil Application No. 548/04 of 2018, Court of Appeal - Bukoba (unreported) where the Court emphasized the importance of specifying what facts in the affidavit are based on personal knowledge and those based on belief. The appellant's advocate argued the 2nd and 3rd grounds jointly. He submitted that the appellant did not breach his duty to the customer because the deceased had authorized a third party to withdraw money from his account as he had shared his credentials. To support his contention, he cited a persuasive case of Aida Atiku v. Centery Rural Development Bank Limited, Civil Suit No. 0754/2020, High Court of Uganda - Kampala (unreported) where it was held that the bank is not liable to refund the money for which the withdrawal was authorized by the customer and where the withdrawal is a result of the customer sharing the credentials with a third party. In his view, the administrator of the estate of John Kiula cannot challenge the contract between the deceased and the 3rd party as his duty is only limited to collection of the deceased's estate. Regarding the 4th ground, the appellant's counsel argued that the respondent had the burden to prove his case against the appellant. He argued further that the duty to prove that the deceased did not authorize Zanziba Nyihata Co. Ltd to withdraw money from his account or that fraud was involved in the said transaction. He cited the case of Athuman Amiri v. Hamza Amiri, Civil Appeal No. 8/2020, Court of Appeal - Arusha (unreported) to support his contention that the burden of proving a fact lies on the party who substantially asserts existence of the fact. On the 5th ground, he argued that the trial magistrate acted on extraneous matters as the issue of principal - agent relationship was neither pleaded in the pleadings nor in the issues framed. In his view, the trial magistrate ought to have confined herself to the pleadings and issues framed in court. To bolster his argument that the court should confine itself in pleadings, he cited the case of Hood Transport Company Limited v. East African Development Bank, Civil Appeal No. 262/2019, Court of Appeal - Dar es Salaam (unreported). Arguing the 6th ground, the learned counsel submitted that the award of 1,026,168.18 as specific damages and Tshs. 1,026,168.18 as principal sum was not proved. In his view, the respondent did not claim Tshs. 1,026,168.18 as specific damages, thus, it was wrong for the trial magistrate to award it. He cited the Athuman Amiri case which held that the court must award reliefs claimed. The respondent only prayed to be Page 6 of 12 paid 1.6 million and costs of the suit. He submitted further that specific damages have to be specifically pleaded and proved. To cement his submission on specific damages he cited the cases of Zuberi Mgushiro v. Anicet Mugabe (1992) TLR 137 and Borham - Carter v. Hyde Park Hotel (1948) TLR 64. On the 7th ground, the learned counsel contended that the respondent failed to prove that he suffered general damages despite the fact that the award of general damages is in the discretion of the court, the same must be exercised judiciously by giving reasons. To support his contention, he cited the cases of P.M Jonathan v. Athuman Khalfan (1980) TLR 175 and Alfred Fundi v. Geled Mango, Civil Appeal No. 49/2017, Court of Appeal - Mwanza (unreported). On the last ground, the appellants counsel argued that the trial magistrate failed to analyze the evidence on record, thus, arrived at an erroneous decision. First, the responded departed from his claim of Tshs. 65,973,832/= as specific damages and Tshs. 1,026,168.18/= as principal sum. This is contrary to the principle that parties are bound by their pleadings as held in Athuman Amiri case. Second, the respondent failed to show that the appellant breached her duty of care to the deceased. Page 7 of 12 Third, the trial magistrate did not consider the fact that the appellant upon receiving information on the death of her client immediately blocked his account. Counsel for the respondent opposed the appeal in the order of submission made by the counsel for the appellant. On the 1st ground of appeal, he contended that the verification clause on the plaint complied with Order VI Rule 15 of the CPC as it shows what information is based on personal knowledge and those based on information received from another source. He urged the court to disregard the Anatol Peter Rwebangira case cited by the appellant as the same was not attached to his submissions. He disputed the appellant's contention that the value of the subject matter was not stated that paragraph 3 of the plaint contained the value of subject matter and paragraph 11 pleaded specific damages for the purposes of court fees and jurisdiction. He cited the case of Tanzania - China Friendship Textile Co. Ltd v. Our Lady of Usambara Sisters (2006) TLR 20 which held that only specific damages are used to determine pecuniary jurisdiction of the court. On the 2nd and 3rd grounds, the respondent's counsel argued that the loan agreement did not provide for the requirement that the debtor shall surrender his credit card but the security was the deceased's furniture and salary. In his view, the appellant breached his duty of care as even after being informed that the deceased had died, his account was not blocked. In addition, DW1 testified that Zanziba & Nyihita were their agents, thus, their acts were binding on them as provided under section 134 of the Law of Contract [Cap. 345 R.E 2019]. Challenging the 4th ground, the learned advocate for the respondent submitted that the deceased never authorized the lender to debit his account, thus, he proved his case as required under section 110 and 111 of the Evidence Act [Cap. 6 R.E 2022]. He opposed the 5th ground by stating that the trial court reached its decision by reasoning the relationship between the appellant and Nyihita as the appellant brought Nyihita as her witness and tendered the loan agreement. In his view, trial court based its judgment on the best principle of the bank as it was wrong for the appellant to allow a 3rd party access to the customer account. On the 6th ground, he argued that the respondent pleaded and proved the principal sum and specific damages he was awarded by the trial court. On the complaint that the general damages awarded was without justification, the respondent's counsel argued that the respondent had Page 9 of 12 testified how he suffered mental pain and suffering caused by the appellant's act. Thus, the trial court was justified in awarding general damages. On the last ground, the learned counsel submitted that the respondent proved that the amount of Tshs. 1,026,168.18 was withdrawn from his account as evidenced by the exhibits tendered. In his opinion, the appellant's evidence contained contradictions and deviated from her pleadings. He contended that the respondent was entitled to win the case as his evidence was heavier than that of the appellant. To support his contention that a party with heavier evidence is entitled to win, he cited the case of Mohamed Said v. Mohamed Mbili [1984] TLR 113. In rejoinder, the appellant's counsel essentially reiterated his submissions in chief. In my view, the 2nd, 3rd, 4th, 5th, 6th, 7th and 8th grounds are similar. They present one major issue of whether the respondent proved his claims against the appellant. I will therefore, discuss the 1st ground separately and the rest of the grounds jointly. The appellant in the 1st ground faulted the respondent's plaint in that it did not verify paragraph 11 nor stated the value of the subject matter. I Page 10 of 12 a i L find this complaint lacking in merits as the said paragraph is verified in the verification clause where the respondent stated the source of information being his advocate. On the failure to state the value of the subject matter, paragraph 3 of the plaint clearly shows the cause of action and the nature of the claim. Therein, specific damages principle sum claimed are stated. Next for consideration is whether the respondent proved his claims against the appellant. There is no dispute that the money was withdrawn from the deceased's account by his lender through ATM after disclosure of his ATM card's credentials. This is per the undisputed evidence of DW2, the loan officer at Zanziba & Nyihita Co. Ltd who testified on how they recovered the loan. The trial court found that in so doing, the lender was acting as agent of the appellant. I respectfully do not agree. There is no evidence at all on record which suggests that the appellant was a party to the loan agreement between the deceased and his lender nor that the appellant authorized the lender to do lending business on her behalf. The conclusion reached by the learned magistrate, in my view, is due to her erroneous interpretation of the provisions of the Law of Contract Act [Cap. 345 R.E 2019] as reflected at pages 13 -14 of the trial Court's judgment. Page 11 of 12 The evidence of DW1 is clear that one John Magori of Zanziba and Nyahita Co. Ltd admitted to be the one who withdrew the money and not the deceased. Since the evidence that the deceased disclosed his ATM card credentials to a third party to whom he surrendered the said card is undisputed, the appellant cannot be held liable for transactions conducted through the said card by the third party. In the event, I find merits in the appeal. I allow it with costs. The decision of the trial court is set aside. 1/8/2023 Court: Judgment delivered in the presence of Steward Ngwale, learned advocate for the appellant who is absent and in the absence of respondent. Sgd. I.C. MUGETA JUDGE 1/8/2023 Page 12 of 12