NATIONAL OIL T LTD VS NASSORO MOHAMED ISLAM COMM CASE NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL CASE NO. 9721 OF 2024 BETWEEN NATIONAL OIL (T) LIMITED....................................... PLAINTIFF VERSUS NASSORO MOHAMED ISLAM..................................... DEFENDANT RULING Date of last order: 10/06/2024 Date of ruling: 21/06/2024 AGATHO, J.: This ruling was prompted by a Preliminary Objection (PO) on point of law raised by the defence counsel against the plaintiff's case to the effect that this court lacks jurisdiction to entertain the suit at hand because is based on lease. For that reason, it is a land dispute that ought to be instituted in a land court rather instituting at the High Court Commercial Division. The parties enjoyed legal services of learned counsel. Whereas Mr. John Laswai represented the Plaintiff, and Mr. Jerome Msemwa appeared 1 for the Defendant. The hearing of the PO was conducted orally on 10th June 2024. Mr. Msemwa being the defendant's counsel broke the ice by submitting that this court has no jurisdiction to entertain the matter because under Section 37(e) of the Land Disputes Court Act Cap 126 states that proceedings related land are deal with land courts. Also section 167(1) of the Land Act [Cap 113 R.E. 2019] gives exclusive jurisdiction to High Court Land Division to deal with land disputes. He submitted that the parties cannot choose which court to their dispute. The question as to where to file the case is determined by the law. To support his submission, Mr. Msemwa cited the case of Michael Mwailupe v CRBD Bank Limited and Others, Land Case No. 7 of 2003 HCT Land Division at pages 6-7. In this case, the court decided that section 167(1) of the Land Act gives exclusive jurisdiction to the land court. See also page 8-9 of the same case. As per that case leases are covered under Section 167(l)(ii) of the Land Act. He submitted that leases fall under exclusive jurisdiction of land court. The learned defence counsel went on submitting that in the case at hand, looking at the plaint paragraph 3 and even annexture-1 it is clear 2 that the dispute is about lease. There is lessor and lessee relationship. That is landlord and tenant relationship. The disputes as to lessor and lessee relationship is adjudicate land court. Mr. Msemwa referred another case, that of Rashm Mangal das Taichura, Jayesh Mangaldas Raichura, Ketan Pranlal Dewani Vs Lavender Villas Limited, and two others, Commercial Case No. 197 of 2002 HCCD at DSM at page 17 defines commercial case. And those items listed, landlord and tenant relationship is not included. In brief, Mr. Msemwa submitted that since the cause of action and prayers especially prayer (I) the plaintiff is complaining about breach of lease agreement and claim of payment for rent. This court has no jurisdiction to entertain such suit. He thus prayed that the suit be struck out with costs. On the adversary side stood Mr. Laswai. He submitted on behalf of the plaintiff that this court has jurisdiction to entertain the matter because the dispute that led to filing to this case is a breach of commercial lease. He argued that the defendant leased the petrol station to the plaintiff. It was his view that the petrol station is business entity and therefore its leasing is a commercial transaction. 3 Mr. Laswai submitted that the foregoing fact is corroborated or supported by the law that established this Commercial Division, looking at High Court Commercial Registry Rules G.N No. 149 of 1999 which establishes the High Court Commercial Division (HCCD) herein under rule 2 (c) defines what is a commercial division. He insisted that the dispute at hand is of commercial significance. The plaintiff's counsel was of the view that a party has an option to file the case in the High Court Land Division or in this court (High Court Commercial Division). Under the circumstance of the plaintiff he has chosen this court so that the matter can be expeditiously determined. According to him that one can note the same when examining HCCD Rules GN No. 250 of 2012 under rule 5(1) and (2) it covers immovable property which in Mr Laswai's view includes petrol station. This court therefore has jurisdiction to entertain the matter. Mr. Laswai was of the further view that his submission is supported by the Court of Appeal decision in National Bank of Commerce Limited Vs. National Chicks Cooperation Limited, Civil Appeal No. 129 of 2015 CAT at DSM at page 21. He submitted that the said appeal originated from commercial case in which similar objection like the one at hand was 4 raised and the CAT held that the HCCD has jurisdiction to entertain the matter. The plaintiff's counsel tried to impress the court that since the dispute relates to operation of the petrol station under a lease at page 2 of the contract which is about rental instalment, then that is business based on commercial nature and which the plaintiff has opted to file the case in this HCCD. Therefore, this court has jurisdiction. He suggested that that falls within rule 2 of the HCCD Rules defining commercial case. Furthermore, he responded to the two authorities which Mr. Msemwa cited, which are Kinondoni District Land and Housing Tribunal (DLHT) herein and Ilala DLHT. These are decisions of subordinate courts/quasi judicial bodies or tribunals. He said they are inferior, irrelevant, and they should not be considered. Mr. Msemwa had a brief rejoinder that this is a land case, and the answer is found in National Bank of Commerce Limited (supra) at pages 30-32. At page 31 last paragraph the CAT is clear that parties should file cases in respective divisions. The defence counsel's point was that the matter of landlord and tenant, is entertained by land courts as stated by 5 Land Act part IX. This part of the law provides that all leases' issues should go to land courts. To contradict Mr. Laswai's submission, Mr. Msemwa submitted that National Bank of Commerce Limited's case (supra) was about loan agreement and mortgage. The defence counsel rightly submitted that the case did not deal with tenancy agreements. There is nothing about payment of rent therein. Again reacting to Mr. Laswai's attacks on the cases he cited, Mr. Msemwa submitted that the case of Mwailupe (supra) held that lease disputes should be dealt by the land court and that has been supported by CAT in National Bank of Commerce Limited's case at page 31. The defence counsel also differed with the plaintiff's counsel who cited rule 5 of the HC Commercial Court Procedure rules in that rule talks about possession and not breach of leases and payment of rent. Mr. Msemwa rejoined further that the definition of commercial case or commercial dispute found under rule 2(c) is about commercial contract. That does not deal with tenancy agreement. Having internalized the parties' submissions for and against the PO that this court lacks jurisdiction to entertain the suit because it is about 6 lease, which is a pure land matter the it has the following observations. Along with that the analysis of the law is sketched and ultimately conclusion is drawn. First and foremost, it is important to appreciate the definition of a term "lease." Section 2 of the Land Act [Cap 113 R.E. 2019] defines lease to mean a lease or sublease, whether registered or unregistered of a right of occupancy and includes a short-term lease and agreement to lease. But a more elaborative definition of the term lease is found in the Indian case of Anwar Ali Vs. Jamini Lal AIR 1940 Cal.89. In this case the court defined lease with reference to Section 105 of Transfer of Property Act to mean a transfer of a right to enjoy property made for a certain time, express or implied or in perpetuity, in consideration of a price paid or promised. It is a transfer of a right of enjoyment over land for a certain time. To dispose the PO, the court raised several issues. First, whether lease/tenancy agreement is commercial dispute or land dispute? The answer to this question is found in the laws (the Land Act Part IX, Land Courts Act Section 167, and HCCD Procedure Rules rule 2 and rule 5 and the pleadings). Leases are covered by Part IX of the Land Act. HCCD 7 Procedure Rules 2012 as amended in 2019 conspicuously lacks a provision on lease, leave alone a mention of that word. Rule 2 lists disputes that this court can entertain. It is befitting to state here that lease agreements are not covered in the HCCD Procedure Rules. Therefore, this court is precluded to deal with leases. Looking at the pleadings especially the plaint the facts are clear that the dispute is anchored on lease agreement. See for instance paragraphs 3, 4, 5, 6, 7, 11, 12, and 13 of the plaint. There are facts about landlord and tenant relationship. Claims that the defendant has interfered with plaintiff's peaceful enjoyment of the leased land. Reliefs section especially item (i) is loud that plaintiff seeks court order declaring the defendant to have breached the registered lease agreement by leasing part of the leased land to third parties, allegation that the plaintiff had paid rent, etc. These facts and reliefs sought clearly indicate the dispute is a pure land matter regardless of colossal sum of money claimed by the plaintiff as lost profits and compensation. Being a land dispute, the same cannot be entertained by this court. Put it blunt the HCCD lacks jurisdiction to deal with lease disputes. Understandably, Mr. Laswai for the plaintiff tried to convince the court that this was commercial lease agreement. That terminology is alien 8 to the HCCD Procedure Rules. It will also be dangerous to assume that every contractual dispute should be entertained by the HCCD. Moreover, the citing of rule 5 (2) of the HCCD Procedure Rules is a misnomer because the provision though deals with issue of immovable property, but it is limited to proceedings for recovery of possession of immovable property. Possession is not the same lease. Besides in the case at hand the plaintiff is not claiming possession of immovable property. Next issue is whether the HCCD can deal with matters that are not commercial dispute per se.? The CAT in National Bank of Commerce Limited's case (supra) has answered this issue. It held at pages 21 - 22 that Commercial dispute interwoven with non-commercial dispute can be handled by the HCCD. In my view the court from the outset must determine what is the denominator in a particular case. If the denominator is non-commercial the case cannot be entertained by HCCD. See National Bank Commerce Limited's case pages 21-22. See also Morogoro Hunting Safaris Vs. Halima Mohamed Mamuya, Civil Appeal No. 117 of 2011 CAT, this case was about shareholding in a company. That the respond was a shareholder and director of the appellant company. But the case was interwoven with defamation. That the letter the appellant wrote 9 to the Ministry of Natural Resources and tourism was defamatory. The HCCD awarded TZS 50 million for the same. The CAT found that the HCCD did not act without jurisdiction because the substrum/denominator was company dispute. It was a commercial case. As per Section 5 of the Judicature and Application of Laws Act [Cap 358 R.E. 2019], a judge of High Court may exercise all or any part of the jurisdiction of, and all or any powers and authorities conferred on the High Court. But the purpose of establishing High Court Divisions will be defeated if these Divisions will entertain matters beyond the areas for which they were established. This warning is given in the National Bank of Commerce Limited's case (supra). Before concluding, I should make few remarks on the two cases cited by Mr. Msemwa. These are, Michael Mwailupe Vs CRBD Bank Limited and Others, Land Case No. 7 of 2003 HCT Land Division at DSM; and that of Rashm Mangal das Taichura, Jayesh Mangaldas Raichura, Ketan Pranlal Dewani Vs. Lavender Villas Limited, and two others, Commercial Case No. 197 of 2002 HCCD at DSM where what amounts to a commercial case was explicitly expounded. Contrary to what Mr. Laswai submitted these are relevant cases. They are not decisions of io District Land and Housing Tribunal (DLHT). However, they were cited in the decisions of the DLHT, which I will not cite them here. These were secondary sources. Mr. Msemwa may be blamed for not referring directly to primary sources, that is, the High Court decisions. Another point to be highlighted is Mr. Laswai's reading of National Bank of Commerce Limited's case (supra) that it is similar to the case at hand. Truly, there was a PO raised to the extent that the HCCD lacked jurisdiction because the dispute was thought to be land matter. But reading the said case it becomes apparent that it was about loan agreement and mortgage. As rightly held by the HCCD in Rashm Mandal das Taichura's case (supra) that where land merely arises as ancillary issue or relief and the HCCD may have jurisdiction if the denominator. For if the denominator here is the overdraft facility or loan agreement, and land/mortgage is merely security. The dispute may essentially be for loan recovery which is a commercial dispute. Regarding Mwailupe's case (supra), there was obiter dictum by the learned judge that justice would have been best served if the law could give an option for a party who has a matter comprising of both commercial and land elements to either file it the High Court Land Division or High Court Commercial Division. In my view that would encourage forum 11 shopping. And I have stated earlier the court has firstly to determine the denominator of the dispute. Even if it is a mixture of commercial and land elements there must be dominant element. For instance, leases may involve huge sums of monies and may have commercial significance, but it remains to be a land dispute. In lieu of the foregoing I find merit in the PO raised that this court lacks jurisdiction to deal with lease dispute, as it is a pure land matter. Consequently, the suit is struck out with costs. Order accordingly. DATED at DAR ES SALAAM this 21st Day of June 2024 12 Date: 21/06/2024 Coram: UJ. Agatho, J For the Plaintiff: Daniel Yona, Advocate For the Defendant: Paul Mtui, Advocate B/C: E. Mkwizu Court: Ruling delivered today 21/06/2024 at 10:00 A.M.in the presence of Daniel Yona, advocate for the Plaintiff, and Paul Mtui, advocate for the Defendant. U. J. AGATHO JUDGE 21/06/2024 13