Jdgment palemony

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA IN THE SUB-REGISTRY OF MWANZA AT MWANZA CIVIL CASE NO. 13 OF 2023 PALEMON CONSTRUCTION LIMITED ……........................................ PLAINTIFF VERSUS BANK OF AFRICA TANZANIA LIMITED …………………….…......…… DEFENDANT JUDGMENT 16th December, 2024 CHUMA, J. Parties had banker customer relationship until 2022 when things turned sour. As a result, the plaintiff instituted this suit alleging that the defendant breached contractual obligations by withholding the properties pledged as security. The facts giving raise to this suit are easy to comprehend. On 16.10.2017 the defendant issued performance guarantee to the plaintiff for the tender no. AE/001/2017/2018/MZA/W/01 which was in respect of periodic maintenance works along Mwanza to Shinyanga border road (first tender). As security, the plaintiff pledged two motor vehicles (construction machines) with Registration No. T690 ATW and T624 ATW make CAT Grader Model No. D6 and a Bull Dozer with model No. SD22S. It is the plaintiff averments that the contract was well discharged but their request to the pg. 1 defendant to return the documents pledged as a security was not heeded to. In 2018, the plaintiff requested the defendant another guarantee in tender no. AE/001/2018-19/KG/W/01/01 (second tender). As a result, the defendant requested from the plaintiff for more security hence Certificate of Title No. 16544 LR in respect of Plot No. 571 Block ‘C’ Nyegezi Mwanza city was added as security. The plaintiff claims that the defendant delayed to pay the guarantee until when she opted to cancel the arrangement. Lastly, in 2022 the plaintiff requested for performance guarantee in Tender No. AE-102/2021-2022/RVM/27 (last tender) issued by Rural Water Supply and Sanitation Authority (RUWASA). The bank accepted the plaintiff’s request vide letter with Reference No. BOA/MWZ/MWS/002/2022. Like in previous contracts, upon the defendant’s demand, the plaintiff deposited a Certificate of Title No. 0330010/18, L.O No. 86000 on Plot No. 176 Block ‘D’ Isamilo, Nyamagana Mwanza as a security. The plaintiff has averred that until the end of December, 2022, the Bank neglected/failed to honor the contract to furnish the agreed advance payment, as a result, the tender was cancelled. pg. 2 It is the plaintiff contention that apart from certificate of title in Plot No. 176 Block 'D' Isamilo Mwanza which was returned, the defendant is withholding all other documents which were pledged as security in the three respective tenders. The plaintiff is therefore alleging that the conduct of the defendant has caused her suffer loss because she could not approach other banks for finance due to lack of securities. She is therefore praying for compensation of TZS. 350,000,000.00 and TZS. 400,000,000.00 being special and general damages respectively. The plaintiff is also seeking the court for order compelling the defendant to return the documents pledged as security on the first and second tender. The defendant through her Written Statement of Defence (WSD), has disputed the plaintiff claims that she neither retained documents related to securities nor delayed furnishing the performance guarantee but it is the plaintiff who cancelled the guarantee contract. It is her assertion that the plaintiff is the one breached the contractual terms for, she failed to channel 100% of its business proceeds through her bank account held by the defendant. The defendant has also argued that the alleged tender by RUWASA came to an end due to the plaintiff’s negligence to apply for renewal. pg. 3 During hearing of the case, Mr. Erick Tumaini appeared for the plaintiff while the Defendant was represented by Lubango Shiduki advocate. Each side had one witness and after closing the hearing, the respective learned counsel filed written submissions which will be considered in due course. It should also be recalled that ahead of hearing, a total of seven issues were framed for determination. They included: 1) Whether the defendant retained and or still retains the plaintiffs’ securities and documents in respect of tender AE/001/ 2017/2018/MZA/W/01 and if so to what extent 2) Whether the cancellation of the request for guarantee in respect of tender No.AE/001/ 2018-19/KG/W/01/01 by the plaintiff resulted from the alleged negligence and delay by the defendant. 3) Whether the defendant neglected and failed to furnish advance guarantee payment to the plaintiff in respect of Tender No.AE- 102/2021-2022/RVM/27, and if so, to what extent. 4) If issue number 3 above is answered in the affirmative, whether the cancellation of Tender No.AE-102/2021-2022/RVM/27 by the Rural Water supply and Sanitation Agency resulted from the defendants alleged neglect to furnish advanced guarantee payment to the plaintif 5) Whether the plaintiff is entitled to claim any interest or lay any action in respect of plot No.571 Block ‘C’ Nyegezi, Mwanza with C.T. No.16544 LR Mwanza against the defendant. pg. 4 6) Whether the plaintiff suffered damages as result of the defendant’s actions and omission. 7) What reliefs are the parties entitled to In the first issue, the court is called upon to determine whether the defendant retained and or still retains the plaintiff’s securities and documents in respect of tender No. AE/001/ 2017/2018/MZA/W/01. PW1’s evidence was that after completing the work in the first tender, their request to the defendant for the deposited motor vehicle registration card (exhibit PE3), was not heeded to. Similarly, after cancellation of the second requested performance guarantee (second tender) and despite the plaintiff’s request made on 22.3.2019, the defendant continued to retain motor vehicle registration card (exhibit PE3) and a certificate of title for Plot No. 572 Block ‘C’ Nyegezi, Mwanza. PW1 testified further that upon termination of RUWASA tender, their efforts to repossess the securities including Certificate of Tittle in Plot No. 176 Block ‘D’ Isamilo, Nyamagana, were not successful. As for the defendant, DW1 testified that upon completion of the first performance guarantee, the deposited securities were returned to the plaintiff. The witness added, after cancellation of the third request of performance guarantee, the defendant did not withhold the pledged security. pg. 5 However, when cross examined, DW1 could not recall when the plaintiff requested release or received the deposited security. It is evident according to a letter dated 22.4.2018 (exhibit PE6 Collectively) that following the first guarantee completion on 13.3.2018, the plaintiff requested for return of securities. Also, as per exhibit PE2, it is clear that the plaintiff on 22.1.2019 cancelled her request for second performance guarantee and requested return of securities submitted. Again on 26.1.2019 the plaintiff reminded the defendant to remit the securities to wit registration cards of the motor vehicles and Title Deed for a plot at Nyegezi. Other reminders were made on 24.11.2022 and 2.3.2023. Based on the above observation, it is clear that despite the plaintiff endless efforts to have the deposited securities, the defendant neglected to return them without any justifiable reason. Since the plaintiff claims that she pledged with the defendant a number of securities were not disputed then it was defendant's duty to prove that at a certain point in time remitted the documents to the plaintiff. Besides, DW1, who was expected to prove the fact for the defendant, he ended up saying he did not remember when the pledged securities were returned to the plaintiff. pg. 6 The defendant in her final submissions argued that there was no proof that the plaintiff handed over Certificate of Title No. 16544 LR Mwanza for Plot No. 571 Block ‘C’ Nyegezi Mwanza city for a performance guarantee of 2018. I partly agree with this argument that there was no any facility letter/contract which shows that the said certificate was pledged as security in 2008. Also, there was no any evidence which proves that the said Title deed was handed over to the defendant apart from letters requesting the defendant to return it. Nevertheless, paragraph 8 of the plaint tells that the plaintiff added the said security for the performance guarantee of the second tender. In response to the paragraph, the defendant in her WSD neither admitted nor disputed the fact. Technically, that was aversive denial which in law is like admission and parties are bound by their own pleadings. In the case of Salim Said Mtomekela Vs. Mohamed Abdallah Mohamed (Civil Appeal No. 149 of 2019) [2023] TZCA 15 (15 February 2023) the court of appeal expressed the following on the legal implication of pleadings: - “That said, since the pleading is a basis upon which the claim is found, it is settled law that, parties are bound by their own pleadings and that any evidence produced by any of the parties which is not supportive or is at variance with what is stated in the pleadings must be pg. 7 ignored… In the bolded expression, it is glaring that since parties are bound by their pleadings, neither the parties nor the court can depart from such pleadings except where the court has granted leave to amend the requisite pleadings.” With the above authority and taking into account the parties’ evidence and arguments, I am of the considered view the defendant still withholds original registration cards of two motor vehicles (Construction Machines) with Registration No. T690 ATW and T624 ATW make CAT Grader with Model No. D6 and Bull Dozer with model No. SD22S. It also clear that the defendant is unlawful retaining Certificate of Title No.16544 LR Mwanza for Plot No.571 Block ‘C’ Nyegezi, Mwanza. The first issue is therefore answered in the affirmative. I proceed with second issue that whether the plaintiff’s cancellation of the request for the performance guarantee in favour of tender No. AE/001/ 2018-19/KG/W/01/01 resulted from the defendant’s negligence and delay. PW1 testified that in October, 2018 the plaintiff secured a tender on construction of the road from Kibondo town, Mwandiga to Manyovu Kigoma. They approached the defendant for performance guarantee and as a condition, they deposited a Title Deed on Plot No. 571 Block ‘C’ Nyegezi. For pg. 8 reasons unknown to the plaintiff, the defendant delayed to issue the guarantee until January, 2019 when the tender was about to be terminated. Inaction of the defendant triggered the plaintiff to cancel the guarantee and made other arrangements to mitigate the situation. DW1 on the other hand told this Court that in 2019, the plaintiff approached the defendant for a loan facility but withdrew his intention and nothing proceeded. Upon examination of the available evidence, it is not in dispute that after securing the second tender, the plaintiff applied to the defendant for another performance guarantee. Parties are also at once agree that the said request was cancelled by the plaintiff in a letter dated 22.1.2019 (exhibit PE4) which partly reads: - “We hereby take this opportunity to inform you that you stop any further processing of the guarantee we request as we do not require it any more due to excessive delay, another alternative was applied to secure the same” However, the plaintiff did not tender any facility letter or contract indicating terms and conditions agreed in second guarantee. There is also pg. 9 no evidence showing when the contract was signed by the parties and duration of the performance. Further, there is no any proof from the plaintiff demonstrating how and to what extent the defendant delayed to pay the guarantee. PW1’s statement that said the tender was about to be terminated, was not only vague but also a mere blanket statement without proof. It is an elementary principle of law in civil cases that whoever alleges on existence of certain facts has a duty to establish and prove them on the balance of probabilities. The one whose duty lies on her shoulder in this case is the plaintiff. This position is envisaged under section 110 and 111 of the Evidence Act, Cap. 6 R.E 2019, which have earned sufficient interpretation in countless decisions. See Paulina Samson Ndawavya Vs. Theresfa Thomasi Madaha (Civil Appeal No.45 of 2017) [2019] TZCA 453 TANZLII (11 December 2019). Owing to the circumstances, I hold that the defendant did not cause cancellation of the request for performance guarantee in tender no. AE/001/ 2018-19/KG/W/01/01. The second issue is thus answered in the negative. The third issue is whether the defendant neglected/failed to furnish advance guarantee payment to the plaintiff for tender no. AE-102/2021- 2022/RVM/27. PW1’s evidence was to the effect that in 2022, the plaintiff pg. 10 won another tender from RUWASA known as Puulu Songambele Water Scheme in Nyasa DC-Ruvuma Region. They once again requested for a bank guarantee from the defendant and deposited a Tittle deed in Plot No. 176 Block ‘D’ Isamilo Mwanza. The plaintiff was only issued with a facility letter but the defendant never gave the guarantee up to January, 2023. As a result, RUWASA wrote a letter to the plaintiff informing her intention to terminate the tender. DW1 countered the plaintiff’s claim stating that it was her who failed to fulfill the conditions including issuance of domiciliation. DW1 added that it is the plaintiff who cancelled the process due to the expiration of time of the tender. Paragraph 12 of the plaint reveals that the tender was cancelled on 16.2.2023 due to failure to submit an advance payment guarantee. The defendant’s response in paragraph 6 of the WSD was that the plaintiff failed to comply with terms and condition of the facility letter including to channel 100% of its business proceeds through bank account held by the defendant. Looking at the facility letter dated 2.11.2022 which was tendered exhibit PE5 and DE2, under clause no. 5.2 the plaintiff was required to pg. 11 channel 100% of her business proceeds through her account with the defendant. Similarly, according to a letter dated 23.11.2022 (exhibit PE5) which was also signed by the plaintiff, the defendant informed RUWASA concerning domiciliation in favor of the plaintiff. Part of the letter had the following expression: - “This is to inform you that, Bank of Africa Tanzania Limited entered into an agreement to extend credit facility to PALEMON CNSTRUCTION LIMITED on certain terms and conditions of repayment and servicing the same. Among the conditions is for M/S PALEMON CONSTRUCTION LIMITED to instruct you to channel all payments due to the Company in regards with the contract No. AE- 102/2021-2022/RVM/27 into the Company’s Account named as M/S PALEMON CNSTRUCTION LIMITED in TZS Margin Account No… held with the Bank of Africa Tanzania Ltd. As per the above we BANK OF AFRICA TANZANIA LIMITED wish to formally instruct you to channel all payment due to…These instructions shall continue to remain in force until communicated to you otherwise by us…” However, upon further examination of the said letter, it appears RUWASA did not sign to confirm conditions for payment. As proof that the pg. 12 plaintiff was aware of the precedent condition of domiciliation, on 14.12.2022, she wrote a letter to the defendant reminding payment of the guarantee and intention to cancel the contract. The said letter reads: - “Our records indicates that the request was accepted vide your offer letter dated 23/22/2022 where among other things you requested confirmation of account domiciliation from the client who agreed By this letter we like to express our disappointment that the guarantee has not been issued to us despite fulfilling all conditions including submission of all required documents, surrendering the security to you and depositing the money for the request payment …” Since RUWASA never signed exhibit PE5, I am of the respective view that the plaintiff has failed to prove that the condition contained on clause No 5.2 of the facility letter was complied with so that the defendant could perform her contractual obligations. In the upshot, the third issue is answered in negative that the defendant never neglected or failed to furnish advance guarantee payment to the plaintiff in respect of tender no.AE- 102/2021-2022/RVM/27. pg. 13 With the foregoing deliberation, the 4th issue need not detain any longer. It is evident that cancellation of Tender No. AE-102/2021- 2022/RVM/27 by RUWASA was not occasioned by the defendant’s negligence to furnish advanced guarantee payment to the plaintiff. According to exhibit E1, it is apparent that RUWASA cancelled the tender because the plaintiff failed to submit an advance payment guarantee and performance security. In addition, the plaintiff failed to apply for extension of time in order to comply with tender conditions. The fifth issue is whether the plaintiff is entitled to claim any interest or lay any action in respect of Plot No. 571 Block ‘C’ Nyegezi, Mwanza with C.T. No.16544 LR Mwanza. Despite the fact that the name contained in the Title deed in respect of Plot No.571 Block ‘C’ Nyegezi, was of PW1 the same was pledged as a security by the plaintiff in accordance with clause No. 3.1 of the Facility Letter dated 2.11.2022. In my view under privity of contract, the plaintiff has right to claim against the defendant over the said title deed based on the contract which binds the parties herein. The sixth issue for determination is whether the plaintiff suffered damages as result of the defendant’s actions. The basis of the plaintiff’s claim of damages is on failure by the defendant to release and discharge pg. 14 documents deposited as securities. As such, the plaintiff asserts to have suffered financial and sociological damages at the tune of TZS. 350,000,000.00. It is also the plaintiff contention that withholding the pledged documents by the defendant failed her to secure finances from other business lenders. As a rebound from the first issue which was answered in affirmative, it is clear that the defendant is until now withholding the plaintiff documents pledged as security since 2018 without any legal justification. Taking from there and considering that the documents retained have financial implications, I am convinced that, the plaintiff suffered damages. The plaintiff is therefore claiming payment of TZS. 350,000,000.00 and TZS. 400,000,000.00 being specific and general damages. Principally, as held in many cases including Zuberi Augustino Vs. Anicet Mugabe [1992] T.L.R 137, the law on specific damages is well established that they must be specifically pleaded and strict proved. They are exceptional in nature as they are not awarded as a matter of course or out of prudence. See also the case of NBC Holding Corporation Vs. Hamson Erasto Mrecha [2002] T.L.R 71. Having examined the evidence of PW1, it seems clear that he did not substantiate how the plaintiff is entitled pg. 15 to specific damages at TZS. 350,000,000.00. In fact, during cross examination, PW1 conceded there was no evidence offered to prove that they failed to obtain loan facility from other financial institutions for want of securities. Regarding general damages, the law is also clear that these do not need to be specifically claimed or proved to have been sustained but the law presumes follow from the type of wrong complained of. General damages do not need to be specifically claimed or proved to have been sustained. This was stressed in Anthony Ngoo & Another Vs. Kitinda Kimaro (Civil Appeal No. 25 of 2014) [2015] TZCA 269 (25 February 2015). Considering the evidence on record, it suffices to hold that the plaintiff is entitled to general damages because the plaintiff successfully proved that she unlawfully withheld the documents deposited as security. However, the amount of TZS 400,000,000.00 sought by the plaintiff is exorbitant. The defendant is ordered to pay the plaintiff TZS 20,000,000.00 being general damages. In the event then the suit partly succeeds as here under; pg. 16 i. The defendant is ordered to return original registration card of two motor vehicles (Construction Machines) with Registration No. T690 ATW and T624 ATW make CAT Grader with Model No. D6 together with a Bull Dozer with model No. SD22S. ii. The defendant is ordered to return original Certificate of Title No.16544 LR Mwanza on Plot No.571 Block ‘C’ Nyegezi, Mwanza with iii. The defendant is ordered to pay the plaintiff TZS. 20,000,000.00 being general damages. iv. The defendant shall shoulder costs of this suit. It is so ordered. DATED at MWANZA this 16th day of December, 2024. W.M. CHUMA JUDGE pg. 17 The Judgment is delivered before Mr. Erick Korongo advocate and Ms. Rose Makori advocate for the plaintiff and defendant respectively this 16 th day of December, 2024. J. MUSAROCHE DEPUTY REGISTRAR pg. 18