Misc

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (LAND DIVISION) AT DAR ES SALAAM MISC. LAND APPLICATION NO. 28307 OF 2024 (Arising from Land Case No. 28229 of 2024) PROJEST KATABAZI SHUMBUSHO................ ....................... 1st APPLICANT JOYCE KOKWENDA SHUMBUSHO........................................ 2nd APPLICANT VERSUS BANK OF AFRICAN TANZANIA LIMITED.......................... 1st RESPONDENT RAYTON KWEMBE............................................................ 2nd RESPONDENT NAMPULA AUCTION MART COMPANY LIMITED................ 3rd RESPONDENT BILOSTAR DEBT COLLECTORS CO. LTD............................. 4th RESPONDENT SHULTZ - NET LIMITED..................... 5TH RESPONDENT / Interested Party TAUKA THEODOR KINYAIYA............. 6TH RESPONDENT / Interested Party RULING Date of last Order: 16/12/2029 Date of Ruling: 23/12/2024 LA LTAl KA, J. The Applicants have moved this Court seeking for a temporary injunction aimed at restraining the Respondents, their agents, or anyone acting under their instructions from evicting, transferring, disposing of, or interfering with the Applicants’ property. The property in question was Page 1 of 13 described as constituted under Certificate of Title No. 108510 on Plot No. 2043/11, Block 'L', Mbezi Beach Area, Kinondoni, Dar es Salaam. Parties opted for hearing of the application by way of written submissions. With a nod of approval by this Court, a schedule to that effect was ordered. The Applicants and the 2nd Respondent enjoyed the skilful legal services of Messrs. ROBERT R. RUTAIHWA and MARCO FRANK MKUMBO, learned Advocates, respectively. They deserve commendations for spotless compliance with the ordered schedule. The next part of this Ruling is, in that order, a summary of submissions by both parties, my analysis of the law and the verdict. Mr. Rutaihwa explained that the injunction was sought pending the hearing and determination of Land Case No. 28229 of 2024. He then outlined the facts leading to the application, stating that the matter stemmed from a deed of settlement and the decree that resulted from it. This decree, Counsel averred, related to a credit facility involving the 1st, 4th, 5th, and 6th Respondents and the Applicants, who were decree holders and judgment debtors, respectively. He added that the Applicants and the 6th Respondent had acted as guarantors to the loan executed between the 1st and 5th Respondents. Page 2 of 13 Mr. Rutaihwa recounted that, following a dispute in 2022, the parties resolved the matter amicably through a deed of settlement in Land Case No. 19 of 2022, which led to the court extracting a decree. As a result, he asserted, the parties' statuses were transformed, with the 1st and 4th Respondents becoming decree holders and the other parties becoming judgment debtors. Annexure PKS 3 to the joint affidavit was cited as proof of this decree. Counsel stated that in September 2024, the 1st Respondent, without consulting the Applicants, advertised the Applicants' property for sale, claiming to exercise a power of sale under a mortgage. This action, Counsel averred, disregarded the decree and the covenants in the deed of settlement. The 1st and 3rd Respondents subsequently sold the property to the 2nd Respondent, Counsel recounted, allegedly through a tender process, and later involved the 4th Respondent to evict the Applicants from the property, which was their residential house. The learned Advocate submitted further that the sale of the Applicants' property was conducted contrary to court orders and established procedures, which were outlined under Order XXI Rule 20 of the Civil Procedure Code. He contended that the sale process was flawed, lacking statutory notice, and conducted in violation of the law. Page 3 of 13 To support the above argument, Counsel referred me to the decision of the apex Court in Balozi Abubakari Ibrahim & Another Vs M/S Benandys Limited & 2 Others, Civil Revision No. 6 of 2015 CAT (Unreported), where it was held that execution of decrees is a judicial function requiring strict adherence to legal provisions. He further cited MS Sykes Insurance Consultants Co. Ltd v MS Sam Construction Co. Ltd, Civil Revision No. 8 of 2010 (Unreported), emphasizing the need for compliance with mandatory legal provisions in execution processes. Mr. Rutaihwa also raised concerns about the irregularities in the advertisement of the sale, referring to conflicting details in two advertisements—one indicating a public auction on 27th August 2024 and another indicating a tender process with bids opening on 4th September 2024. He argued that this inconsistency, along with the improper use of a non-local newspaper, violated Section 52 of the Land Act and Regulation 13 of the Land (Conduct of Auctions and Tenders) Regulations, 2001 GN. No. 73/2001, which required advertisements for tender sales to be made at least two months prior to the bid opening. Furthermore, he questioned the bona fides of the 2nd Respondent, arguing that they could not be considered a bona fide purchaser for value as the title they claimed derived from an irregular transaction that Page 4 of 13 circumvented the decree. He cited the 2nd Respondent's own counter­ affidavit, which indicated that the purchase and subsequent loan arrangements were marred by inconsistencies, such as securing a loan before acquiring a valid certificate of title. He concluded that the Applicants were seeking temporary relief to prevent irreparable harm to their rights while the main suit was pending. He emphasized that the application satisfied all conditions for granting a temporary injunction, as established in the case of Atilio vs. Mbowe (1969) HCD 284. He quoted Justice Mapigano J. (as he then was), who noted that a prima facie case requires only that there be an arguable case worth consideration, without prejudging the merits. He also referred to Colgate Palmolive vs. Zakaria Provision Stores & Another, Civil Case No. 1 of 1997 (Unreported), and the principles outlined in Abdi Ally Suleiman vs. Asac Care Unit Ltd & 2 Others, Civil Revision No. 3 of 2012 CAT (Unreported) to support his submission. Finally, Mr. Rutaihwa urged the court to grant the application, noting that the Applicants had demonstrated a prima facie case, the risk of irreparable harm, and the balance of convenience in their favour. Mr. Mkumbo, Counsel for the 2nd Respondent, vehemently objected. He argued that his client was a bona fide purchaser for value Page 5 of 13 without notice as defined in Suzana S. Waryoba vs. Shija Dalawa, Civil Appeal No. 44 of 2017 [2019] TZCA 66 (11 April 2019; TanzLII). He maintained that the property was lawfully acquired without fraud, as detailed in paragraphs 7, 9, 10, and 12, together with Annexures RK-1 to RK-5 of their Counter Affidavit. Mr. Mkumbo went on to reason that the grant or denial of the orders sought in the chamber summons is entirely within the discretion of the court. Referring to Atilio vs. Mbowe (Supra), he outlined the conditions for granting injunctive orders, emphasizing the necessity to demonstrate a serious question to be tried, irreparable loss, and greater hardship to the plaintiff than the defendant. On the first condition, Counsel contended that the Applicants failed to demonstrate a serious question worthy of the court's time. He pointed out inconsistencies between the Applicants' joint affidavit and the plaint (Annexure PKS 1), arguing that the cause of action did not arise from a breach of the consent decree but rather challenged the procedure of auctioning the suit property. Citing Euro Commercials Limited vs. Bank of Africa Tanzania Limited and Others, Misc. Civil Application 295 of 2022, (2023) TZHC 17342 (19 May 2023; TanzLII), Counsel emphasized that the Applicants failed to establish a prima facie case. Page 6 of 13 On the second condition, the 2nd Respondent submitted that the Applicants did not prove irreparable loss, as monetary damages would adequately compensate any alleged harm. They referenced T. A. Kaare vs. General Manager - Mara Cooperative Union (1984) Ltd, 1987 TLR 17 (HC), which defined irreparable injury as one that cannot be remedied by damages, and Abdi Ally Salehe vs. Asac Care Unit Limited and Others, Civil Revision No. 3 of 2012, to emphasize that financial loss does not constitute irreparable harm. Regarding the third condition, he argued that the Applicants failed to demonstrate they would suffer greater harm if the injunction were not granted. He submitted that the balance of convenience favoured the 2nd Respondent, as greater hardship would result from granting the injunction. Counsel maintained that the Applicants unjustly benefited in several ways, including their continued physical occupation of the suit property despite the 5th Respondent's breach of the consent decree. He emphasized that such occupation does not equate to ownership, as the 2nd Respondent, being a bona fide purchaser for value without notice, holds a legitimate and protected interest in the property. Page 7 of 13 Counsel for the 2nd Respondent further contended that the sale of the property was lawful, transparent, and consistent with the Auctioneers Act Cap. 227, R.E. 2002, and the stipulated terms in the deed of settlement and consent decree. He dismissed the Applicants' assertion regarding inadequate circulation of the Zanzibar Leo newspaper, arguing that it is widely accessible in Tanzania [mainland]. On the Applicants’ assertion that the settlement deed extinguished obligations under the mortgage deed, Counsel for the 2nd Respondent cited Ibrahim Twahili Kusundwa and Others vs. CRDB Bank Pic and Others, Civil Appeal No. 194 of 2021, [2024] TZCA 7 (19 January 2024; TanzLII) arguing that it was held that the settlement deed does not supersede the mortgage deed absent an express provision to that effect. Referencing Meiya Properties and Another vs. CRDB Bank and 4 Others, Misc. Land Application No. 2299 of 2024, [2024] TZHCLand 288 (3 May 2024 TanzLII), Counsel contended that the Applicants' application lacked merit. In his rejoinder submission, Mr. Rutaihwa contended that the 2nd Respondent's assertion of being a bona fide purchaser without notice of the settlement was an afterthought and should be disregarded. He argued that judicial orders are public, and in this case, the 1st Page 8 of 13 Respondent, who had instructed the 3rd Respondent to sell, had actual notice of the decree and how to enforce it. He maintained that such notice was imputed to the 2nd Respondent, making the latter aware of the decree. Furthermore, he pointed out that the relationship between the 1st and 2nd Respondents, particularly their mutual concealment of conduct, disqualified the 2nd Respondent from being considered a bona fide purchaser for value. The counsel referred to Section 135(1) of the Land Act, which protects bona fide purchasers acting in good faith, and argued that the Respondents were not acting in good faith. He submitted that fundamental flaws and serious omissions by the Respondents vitiated the entire transaction. Addressing the first condition for granting the application, Mr. Rutaihwa dismissed the 2nd Respondent's contention of conflicting facts between the Applicants' joint affidavit and the plaint, describing the observation as incorrect and unfocused. He explained that a cause of action arises from all facts entitling a claimant to relief citing John Mwombeki Byombalirwa v. Agency Maritime Internationale Ltd [1983] TLR 1 to buttress his argument. Page 9 of 13 Counsel further submitted that the 1st and 2nd Respondents' submissions conflicted, with the 1st Respondent claiming to sell in execution of a decree while later asserting a sale under a power of sale. Such contradictions, he argued, created irreconcilable facts and triable issues requiring resolution at trial. Counsel reiterated his reliance on Euro Commercials Ltd and Colgate Palmolive decisions, emphasizing that there was a prima facie case warranting court intervention to allow the parties to be heard. He contended that the Applicants were challenging the manner of execution and the sale of their property, not the validity of the consent judgment itself. He refuted the argument that the Applicants should have filed an application to challenge execution, stating that the suit was based on the consent decree and the deed of settlement. He also responded to the 2nd Respondent's reliance on Ibrahim Twahili Kusundwa, arguing that the case was misapplied and that any sale of mortgaged property required compliance with procedural notices, the absence of which vitiated the sale. He cited Bagamoyo View Hotel Ltd v. EFC Tanzania M.F.C Limited and Two Others, Land Case No. 54 of 2019, HCT-Land Division-DSM (unreported), to support his arguments. Page 10 of 13 On Section 52 of the Land Act, Counsel submitted that the provision applied to the case and that the Respondents had failed to reconcile it with the facts. He also argued that the advertisements given for the sale were evidence of fraud, asserting that the 2nd Respondents claim that the sale complied with procedure was misleading and unsupported by evidence. Addressing the second and third conditions for granting the application, he submitted that the Applicants had demonstrated their fulfillment. He emphasized that the Applicants faced irreparable harm, including losing their home, which could not be compensated by monetary value. He argued that the 1st and 2nd Respondents would not suffer irreparable harm, as the 1st Respondent could recover the decretal sum from the 5th Respondent, while the 2nd Respondent could be compensated with interest. He further submitted that the protection of a bona fide purchaser under Section 135(1) of the Land Act, Cap. 113 [R.E 2019], only accrued upon absolute registration of the transfer. He referred to Moshi Electrical Light Co. Ltd & 2 Others v. Equity Bank (T) Limited & Others, Land Case No. 55 of 2015, HCT-MWZ (unreported) to support this argument. Page 11 of 13 Lastly, he argued that the factual accounts introduced by the 2nd Respondent's counsel were improperly brought through submissions instead of affidavits and should be disregarded. He asserted that the application met the requisite conditions for its grant, emphasizing that the Applicants stood to suffer irreparable harm if denied, whereas the Respondents faced no irreparable harm. He concluded by urging the court to grant the application with costs. I have dispassionately considered the rival submissions. The following issue arises for my determination: Whether the Applicants have demonstrated a prima facie case and met the conditions for the grant of the relief sought. Counsel for the Applicants contended that the Respondents' conflicting submissions revealed irreconcilable facts and triable issues requiring judicial intervention. He emphasized that the Applicants were not challenging the validity of the consent judgment but rather the manner in which it was executed, particularly the sale of the disputed property. I am persuaded that the Applicants have established a prima facie case. As held in Euro Commercials Ltd (Supra) and Colgate Palmolive (Supra), a prima facie case exists where there are arguable issues warranting determination. The contradictions in the Respondents' Page 12 of 13 positions, as highlighted by the Applicants, and the procedural irregularities alleged in the sale of the property, satisfy this condition. Regarding the second and third conditions for relief, this court finds that the Applicants face irreparable harm, as they are at risk of losing their home, which cannot be adequately compensated by monetary damages. Conversely, the Respondents' interests can be protected through monetary compensation, as noted by Counsel for the Applicants. In the upshot, the application is hereby granted. The Respondents are restrained from evicting, transferring, disposing of, or interfering with the Applicants' property constituted under Certificate of Title No. 108510 on Plot No. 2043/11, Block 'L', Mbezi Beach area, Kinondoni, Dar es Salaam pending the determination of the main suit. I make no orders as to costs at this stage. It is so ordered. E. I. LALTAIKA JUDGE 23/12/2024 Page 13 of 13