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IN THE COTJRT OF APPEAL OF TANZANIA AT AB.USHA CIVIL APPEAL NO. 39 OF 1993 NJOTI.O FUPJ'UTffilE MART LTD. • Q o ~ a • o • o • • o APPELLAl'ifT vs TANZANIA ELECT:U.IC S'UPPLY CO., LTD. RESPONDEN'.L' (Appeal from the decision of the High Court of Tanzania at .Arusha) ( l,funu o 9 J ., ) dated thG 23rd day of February 1993 in Civil Case No. 97 of 1990 JUDGIVIEHT OF THE COURT 1\7'jTAT l~ ..l..i"i..U ALI 2 C J- • ~ D ~ • o This is an appeal by NJORO FUR..i\fITURE lVIART Ltd. 9 hereinafter called the appellant 9 against part of the judgm11ent and dec:roe oi~ tho High Court at Arusha where the appellant had instituted a suit against TANZANIA ELECTRIC 31JPPLY COiv'IPANY Ltd. 9 hGreinafter called the respondent. The suit vvas for payment of special and generaJ.. daro.ages arising out of alleged negligent conduct on the part o:f thG respondent 1 plus costs and interest. 0 'J:he trial High Court 9 1\l!unuo 9 J. awarded a sum of shs. 728 9 154/70 being part of the special damages claimed 9 plus half of the costs of the suit and 10% intQrest payable· iifrom the date of judgement to the date of final settlement"~ The remainder of appellant 1 s claim was rejected by thG High Courte Appellant was ... 2 aggrieved 9 hen_ce this appeal to this Court. Mr. Jonathan 9 learned advocate 9 represents the appellant in this appeal 9 whereas Mr .. Maro 9 learned advocate 9 represo:rits the respondent. Twelve grounds of appeal were _submitted and argued in the appeal -'before uso It is com:mon ground that on the 17th September / 1989 the car:pent1~y workshop of the appellant at Njoro 9 othervv:i...se kn0vvn as Maili Si ta 9 in Iiioshi municipality 1 was g7J.tted by fire someti.me aft or the respondent I s employees had attended to the electricity line and transform.er servj_ng the appellant's carpentry workshop. That fire also c1aJ.naged the property of the appellant's neighbours. SUbsequently 9 at a meeting held b<=;-bveen the respondent's representatives on one side and the appellant and tts neighbours on the other side 9 the respond.ent 9 through its representatives 9 admitted liability and agreed to compensate the appellant and and the neighbours for the damage suffered. Prolonged negotiations and cmmnunications regarding the quantum. of damages took place between the appellant and the respondent withou.t successo It is com:r.0.011 ground also that in the course of the ne 6 otiations for settlement of claims 9 the respondent asked the appellant to give an estimate of the costs of repairing the dam.aged workshop; and an estimate o:f the loss of profits suffered as a conseq_uence of the- fire. In response to such requests 9 the appellant 3 supplied to the respondent various estimates as per exhib:Lts P2 9 P9 and D6. Exhibit P2 is an estimate prepared by a. firm known as GENERAL KLECTRIC SERVICE and signed by D.Vi.~ in respect of costs for "REPAIR AND REPLACEMENT OF D.Al\1AGED MOTORS AND ELECTRIC INSTALLATION 0 O ~ ii o It is dated 18th January 1990 and puts the cost at shs. 1 9 26-) 9 808.00. Exhibit, D6 is a similar esti:tnate by the same firm. 9 that is 9 GEN~ ELECTPJC SERVICE 9 and is d.ated 25th July 1991. Exhibit D6 puts the cost for "electrical repair 11 of the work- shop at shs. 728 9 154., 70. · Exh. P9 is an accountant's report prepared by one ANAEL PATRICK K.AVISHE (P.VV.3) of NIASAWE and Co., Ltd. 9 a firm of accountants and auditors 9 showinc; that the appellant haa. suffered loss of profits in the region of shs. 17 9 000 9 000/= It is common ground that the appellant is a usual client of MASAWE and. Co. L-td. 9 on retainership basis. Furthermore 9 it is undisputed between the parties 9 that in the course of attempting· to negotiate a settlement of the clairn.s 9 the respondent also undertook its ovvn investigations of the darnage and loss suffered by the appellant. Towards that end 9 one MTORO RAJAB KHALIFAH (D.,W.6) prepared a report of the accounts of the appellru1t. That report 9 admitted at the trial as exhibit D7 showed that the carpentry workshop business was running at a loss at the tiL1e of the · fire incident o D. VJ o 6 is a registered accountant employed by the respondent o 4 It is the appellant's case that it is entitled to be paid not only the su.m of shso 1? 261°9 808/= as per exhibit P2? being the cost of restoring the carpentry workshop to nor.1 :iali ty? but the sum of shs. 17 9 105? 394 1 being the estj-1.1at_ed loss of profits arising from loss of sales to customers. l1urther.6ore? it is part of the appellant's case that the appellant is entitled to be paid compensation :for the loss likely to be suffered as a result of action b_kely to be taken by appellant's customers :for i,ailure to supply goods to the latter as agreed before the workshop was gutted by fire. Appellant furthe:r- contends that any compensation paid . by the respondent should include an element to offset the effect of· ini,lation and devaluation 9 plus interest at ban1::: rate in order to put the appellant in the position it would have been had the workshop continued ,I to operateo The respondent's case on the other hand is to the effect that both estimates by tb,e appellant as per exhibits P2 and P9 are at best 9 unreliableo It is :respondentts contention that the estimate of the cost of rest8ring the workshop as shoVim in exhibit P2 is fraudulent ru.1d. :;rossly exaggerated. Furthennore 9 respondent contends that the true financial position of the workshop at the ti:me of the fin~ incident is that j_ t was 8- loss-making bu.sine ss as shovm in exhi'bi t D7. Furthermore 9 it was part of the respondent's case.at ' I 5 the trial in the High Court that the appellant should have mitigated the .damage by having the damaged workshop machines repaired and installed by GENERAL ELECTRIC SERVICE, the firii1 which was apparently ready to repair and instal the nachines on credit. The first issue for consideration and decision in this case concerns the cost of restoring appellant's woj'.'J.{shop to the working conditions it had prior to being gutted by fireo The only evidence relevant to decision of this issue is exhibit P2 and D6. Both are estimates prepared by the appellant. The learned trial judge d:Lsregarded exhibj_t P2 on the ground that the person v1ho signed j_t 9 that is 9 Do W. 8 9 was not sure of its contents as he claimed not to be conversant with the E,'nglish language in vvhich it was written. The learned trial jud.ge however accepted the contents of Ex:hi bit D6 as 7Jeing :more :celiable and proceeded to award the su.m shown therein 9 that is 9 shs. 728 9 154/70. Bearing in mind that exhibit D6 is a document prepared and supplied by the appellant in the course of negotiation to settle appellant 1 s claims against the respondent 9 we ±~ind no basis for faulting the learned trial judge in that regard. We therefore find 9 as she did 9 that the cost of restoring the_Carpentry workshop to its working condition at the time exhibit D6 vvas • prepared is shso 728 9 154/70. 6 The second issue for consideration and decision is whether the appellant suffered loss of profits as a result of the fire~ The learned trial judge does not appear to have specifically considered this matter when dealing with the eleven issues framed for consideration by the trial courto Obviously the matter fell for consideration ·qnder issue number 9 9 that is 9 11 Has the plaintiff suffered loss of income and if so 9 to what extentn., It would seern that the matter slipped from the attention of the learned trial judge apparently oecause she confineu herself to only one aspect of the issv.e - that ~1.s 1 appellant I s alleged. failure to mi tigaJ6e drunageso Obviously the issue of mitigation of specific daxnages arises only where loss is provede In the present case the only evidence relevant to the issue of loss of profits is to be found in the testimonies of J;.W.3 and D,.1:V.6 arid the respective reports each prepared 9 that is 9 exhibits P9 and D7 respecti voly o I'he testimonies and reports of these 1 accoun.taiits is dia:u1etTically opposed to each other. One supports the contention that appellant's venture was profitable before j_t. was closed dovm. The other supports the contrary vievv that appellant I s venture was making a loss at the material time. Unfortunately neither P.W._3 no:r Do\Vo6 is a.n independent witness 1 because tho former is a retained client who nonnally audits the appellant's accounts 1 arid the latter is an 7 employee of the respondente We think that under these ci:rcrunstances 9 where the burden of proof is upon the appellant (as plaintiff in the case) 9 the appellant has to show that P.U.3 and his report are more reliable than DoW.6 and his reporto It seems to us that this was not done .. It follows ther~fore that the appellant failed to prov2 on a balance of probabilities that he suffered loss of profiJuso The third issue is whether the appellant is entitled to be paid con.pensat:Lon for loss likely to be suffered result as a· of claims likely tc be made for failure to deliver goads t·:::> clients. as agr·eed before the workshop was gutted by fire. The learned trial judge found to the effect that the appellant had received confirmed orders for the manufacture and supply of sundry goods .I to clients before the worlrnhop was gutted by fire. She however cl.id not consider whether the appellant woula. suffer loss· corn.=rnquent upon possible claims by those clients.· In our considered opinion it seems that the appellant 9 on the evidence adduced at the trial 9 has a \ such possible claim.so The obvious defence is that of FRUSTRATION OF CONTRACT arj_sing out of appellant I s worl-rnhop be:.ng gutted by fire. It :follows therefore tha·~ a:r1:;:>ellant is not enti "tled to compensation for possible claj_ms. The fourth issue is ·whether any amount of money awarded to the appellant as damages should include an . ' 8 o' 0 element to offset the effect of inflation and devaluation. We think that since in principle 9 the quanturn of dam.ages has to be such as to restore an injured party9 as far as possible to the position prior to the injury 9 it is correct in law 9 to include in the award of damages an eJ.enent calculated to offset the effect of inflation and devaluation. As stated· by KEl\'IP and Mc OUSTRA 9 learned authors 9 in their THE QUANTUM: OF DATu1AGES 9 Vol. I 9 Second Edi tion 9 :iJ.eaving authority aside 9 both principle and cormnon sense require that the co.urts 9 when they assess an awar·cl of money 9 which is to compensate a plaintiff for the damage caused to him by his injuries 9 should t2J;:e into account large and comparatively permanent chm1ge s in real value 9 Leo 9 in the pu.rt:hasing power, of n10neyn. Unfortunately in the present case 9 I though appellant was represented by experienced Counsel at the trial 9 no evidence or material was adduced at the trial upon which the rate of j_nflation or devaluation could be deterr;1j_ned. We are therefore unable to award any amount for inflation or devaluation~ The fifth s11c1 last issue before us is whether the triaJ_ court ei~rec1 in awarding half of the - costs of the suit instead of granting the. full costs 9 and whether it erred in avmrc1ing interest at 1 O}t from the date of judgement to the date of payment 9 instead of granting interest at bank rate from date of fi~ing the suit to date o±~ payment as prayed. • . l 9 0 0 With regard to the matter of costs 1 Mro Maro 9 learned aa_vocate for the respondent 7 argued in the appeal before us that the trial court was correct in exercising its discretion by granting less than the full costs in favour of the appellant 9 on the ground that the appellant had failed to prove a substantial part of the clain_ contained in the. Plaint. Undoubtedly in our opinion 7 costs a::ce within the discretion of the Court as stated under section 30 of the Civil Procedure Code 7 1966 .. It has however long been established by the courts 9 that costs normally follow the event. See case of KISKA Ltd vs DEANGELIS (1969) EA P7 - 11. Moreover, under aub-section (2) of section 30 of the Civil Procedure Code 9 it is expressly stated that 9 nYJhere the court directs that any costs shall not follow the event 9 the court shall state its reasons in writing". The gist of appellant's complaint is that the court did not state itc?J reasons j_n writing for directing only half of the costs to be paid. The complaint is justified .. Ffe have however to ask ourselves what legal effect does this procedural error have? In our conside~ed opinion 9 since the reasons for awardh1g less than the full costs in favour of the appellant are so obvious 9 the error is curable.. Vife thus cure the error by stating that the c1,ppellant 1 who was the plaintiff in the trial court 9 is entitled to half the costs of the suit l1y reason ,of failure to prove a substantial part of the claim. -~ 10 As to the 1;1atter of payment of interest? it is apparent from the provisions of section 29 of the Civil Procedure Code 9 read together with rule 21 of Order 20 of the same Code that interest is payable on a judgement debt rvfrom the date of delivery of the judgement until the same shall be satisfied"o Under rule 21 of Order 20? "the rate ••• shall be seven per centUIJ per ammn or such other rate 9 not exceeding twelve per centun1 per annum. 9 a:-__; the ·parties may expressly agree in writing before or after the delivery of the judgement or as may be ac1jucJ.ged by consent 11 • It is thus evident that the trial court was in error in maldng a direction for 0 1 Of interest .from the ' date of the judgement to the date of final settlement 11 1 in the absence of agreement by the parties. We are bound to intervene to correct-this error. But before we do so 9 we have to consider whether the ap_pella11t should be paid any interest for the period prior to judgement. Under sectj_on 29 of the Civil Procedure Code? a couint has power 11 o • • to. order interest to be paid up to the date o:f judgement at such rates as it may deem reasonable 0 • II Ii 0 The appellant had claimed in the plaint 9 a interest at banL::: inate 'on the decinetal sum calculated from the date of filing the suit to the date of final judgem.entl_'o We thi:rik? under the circumstances of this case 9 the claim is fully justified.