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Tanzania Judgment

TZHC

19891227 TZHC Tabora

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Source document

01

Holding and result

Failure to pay the fourth instalment on the due date did not constitute a fundamental breach going to the root of the contract, as the parties had agreed to extend the time for payment and the respondent had paid a substantial part of the contractual sum.

Court disposition

appeal dismissed

02

Material facts

Parties

Ramona Nurmau

Appellant Counsel: Mr. Kahangwa

Raymond Joseph Kimaro

Respondent Counsel: Mr. Kwil-dum

Amounts and remedies

  • Contract Price: TZS 180,000
  • First Instalment Paid: TZS 40,000
  • Second Instalment Paid: TZS 30,000
  • Third Instalment Paid (partial): TZS 15,400
  • Third Instalment Balance Paid: TZS 14,600

03

Procedural history

  1. Posture

    Civil Appeal / Judgment on Appeal

04

Questions and positions

Legal issues

Party arguments

Applicant
The respondent's failure to pay the fourth instalment on time amounted to a breach of a fundamental term going to the root of the contract, justifying rescission.
Respondent
Failure to pay an instalment on time was not a fundamental breach; parties had agreed to extend the time for payment, and the respondent remained willing to perform.

05

Court’s reasoning

  1. 01

    Morey Steel & Iron Co. v. Yiu (1884) 9 App. Cas. 434; Chitty on Contracts; Anson's Law of Contract

    Where failure to perform goes to the root of the contract, it may justify rescission; however, not every breach or delay amounts to repudiation, especially where parties have proceeded with performance and agreed to extensions.

06

Ratio, limits and disposition

Ratio decidendi

Failure to pay the fourth instalment on the due date did not constitute a fundamental breach going to the root of the contract, as the parties had agreed to extend the time for payment and the respondent had paid a substantial part of the contractual sum.

Obiter and limits

  • It is more difficult to infer repudiation the further parties have proceeded with performance.
  • Default in payment of an instalment in a divisible contract does not necessarily discharge the contract.

Court disposition

appeal dismissed

Source and reliance status

TZHC · 27 December 1989

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Judgment reading view

Judgment text

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Source document

TZHC

Judgment· 27 December 1989

19891227 TZHC Tabora

IN TIE EIGI:I COURT OF T.ill'TZ,.tlmi. :-,_T T..'.:..J30l:1.L (He) crvn.. APP:ll..'.L NO. 15 OF 1986 (FR0r1 S::IINY/,.NG.\ Rl:1 1 s COURT CIVIL CJ:.STIJ NO. 9/86) 'ilorsus R.,t;_Y}iOND JOSlill?H KIM!:.RO •••••• ' • .insPOND:::DNT i JUDO.IDMENT CHIPETA 2 J .. In S~rzy-anga Resident No.gistrD,to' s Court, tb.o appellant, &mona Nur.1au, ui1soo-:-·'.)oc;fully su..od tho respondent, R.ytlond Joseph Kir.m.ro, for rosctlssion of a_,cc,-rt:ra.ct ontored into botwoon tho parties. . It WM common gr-oui'ld tl:nt in April, 1985~ in a. vorbal cliscission, tho . :ros:;_"','):1.Clcnt 9/fforo/'~u:y tto suit promises bolonging to tho f-9pollr..nt nncl w'.J.ic:. t:.-:, ro;3J?ondont was ro.ntins- end. using it for rosidonti.o.1.- ~ a s ~o::J~o .. Tho a.ppollcnt aq_e_optod tho offer," and so on 10th" May, 1985, tho parties cioctitoci..an o.grconont boforo a prir:m.ry court r,mgistra.tc at Shieyo.nga Urgan Pri1:12.:;.'.Y Court. B"J tlw,t agrocnont, tb.o ·appellant was .to sale his houso (t:!lo suit pr:Jnisos) to tho rospondont for s:1S. 180,000/=. Tho cr,lo prj_c,) was to bo paid in six instnlmonts, .that is, t,c;ta; t:-:..o rospoYJdont 1rv.s to pc.y Shs. 30,000/'(:', after ovary ·tiroo months till 30th Docorilbor, 1989 whon t2J le.st insta.lmont wr-.s to bo puicl. ancl tho_ house ,ms tb.on to bo transferred to. tho rosponlont. The ~'ir:::n:; inst,.::,L..,...:::t of Shs. 40,000/.- ·wo.s p:.'.id on

tho coritro.ctut,J.· clG.to~ Th·J soe:c·:~.c. :instnlIJont of Shs. 30,000/= was to bo paict on 30th August, 1985, tr.c t:.irc."l. on 30th Dooombor, 1985; tho fourth on 30~h .i"..pril, 1986 1 tho fifth on 30t2::. Jul::,', 1985 1 and the last on 30th Novomber, 1986. I-i:, wns "t.i'lo appollc::.nt•s· ovid.ence tl:..at on 25th April, 1 ~ ~ b n t · · · ·. hin · - ........~. approached him ancl to1cyt110.t l.,e ( tho responclent) m,,s fnoing financial c.:n:.". dornGtic problems and so it was not possible for hin to pey tho fou:tth inst;.:;.lmmt on 30th .\pril, 1986 • .t..c·cording to tllo appellant, tho rosponclo: -~ ash.,d for an extension of .tine, and tho appollnnt then told tho rospol)(lor:.t that since tho respondent l:w,cl no r:io110y, t1ioro ,ms no problon, On 20th. rnc:w, ·. filed . 1986: tho appollan-ytlris suit<tlo.irlingroso~sion of the contra.ct on uo ground. tb.q,t t.1.:~ respond.::mt ·h::i!. boon in broo.ch·-of--~ torr.is o_f tho cont:ract by failing to po.y tho fourth-ins-ta.J.oont 1 ' "-'\ ' . In his dofenco, tl:o· rosponcl.ont saic.l thn.t following_ ·th:) oxooution of t:'"o . . -~ agreoBont bo two on t110 p~tios' 'he j_)nid tho first ins talcient \ o·f"'-Sha, 40~000/= . . on t...1.0 contractual dt1to encl tho ,second of Shs. 30 7000/= ~fa.a paid I . I on 30-tl: ,l-..uf,"..'r:t, -- 1985. Tho roapondont wont·on to s2,y thnt h9 ,os su:p:posod:fo pn.y tho

tll:J.rcl inst.2J.nont on 30th Doco□bor, 1985, but on t:.1D,t clato ho' pcid Shs, 15,400/= ,. \ and. Shs~ 14,600/= was to be paid. on 30th Ja...'1.uery, 1986, Howovor, t:'.:at sur.1 ·wc.s paic'. on 10th Fobru,,;cy, 1986,· / / \~,, ). \ .... -- I \ '\ j )/ / '"', '-. '. / 2 ... Tho rospoi1ckmt tostifioc'1.. furtl:...or/}1\'2,15t :~i:iril, 1986, ·ho travollod to :M.agt1,nz(, whore tho appollp,nt rosiclcs 0,ncl tol:J. t!1e a:ppolla.nt t:'..lo. t ho ( tho rospoi;;~~::::::.-'c) wns facing financial problor:is, anc1 so ho roqu.0stoc1 oxtonsion of tine to p~r t~-,_o fourth ins talnont o Ho told. t).-:o c-4:ppoL :mt t;.-~a, t ho ·would.. po.,y tho fourth encl :fif-t~~- -., -~:..;•,· i;18talr.1onts·, that. is Shs·o 60,000/= on 30th July, 198~-• Tho appellant agroocl_, r:,n::~ so -tho rosponclont wont to tho rn1cistra to bo:foro whoo they oxocutod -~:.. .o a,gj_'oooont arid told hio 2.bout t:.10 c.groor:iont as to extension of tine. So llo wn.s surprisocl to loo.rn tl1G. t tLo r,,ppollrmt :1m filo;i_ a, sv.i t for rescission of t::,o co11tracto Tb.o rosponclont concluc1o0.. by .seyin3 t!12.,t :::.o 1"ms ro2.ily to pay tho ronaining suno On tho •ovidonco before l1in, tho lon.r.nocl tri'al rosic\ont oagistrato found a.s a fact that tho rosponclcnt hci. pe,id. L, substantial po.rt of tho contractun.l suB, that ti::.o partio·s bn.ct, o..g:roocl to oxtonl tho tirao to 3Otl1 July, 1986 when

tb.o fourth ano.. fifth instaL1011ts' would.bo·.. paiC-:. 9 anc1 tl.-.:.ct tl10 fo.iluro to pc.jr c,:1 instaJ.Dont on t:J.o duo de.to wcs not a con1i tion procodont for, if it he.cl boo:1, tho parties _would ooarly he.vo so sti:ptllatoc.l ii1 tha contract-• . Du:r:Jng _tho hoari1,s of . this appeal, Mr. Kahangwa, learned counsel for t.~w ap:po2.J.c.nt, relying· on t:io EngliG~1.·cn.so of:Morcy Stool & Iron Co,. Vo lifu;2:lor (18'84) 9 App. c. 434, subnittoC. tmt tho rosppnc:ont's failuro to pay tto instalaont. of 30th 1:..pril 9 1986 wow..tod to a broacl:l of a flmcla.r:iorital tern w:-..tch · 110nt to i:h.o root of tl10 contract. Hr. Kwil-d.ur:1, loarnocl counsel for tho roaponclcnt, · · · ·· · not,· · S".:J.;,.:.' :.:_,i_ :_ t: ..at fo,iluro to p2,y 2,n instalment was/ a breech of_ a funo..ar:1ontd t:..r:.1 V:.0,t coulcl frustrn.to a contr2.ct or ;.,d-co its porrorno.nco inpossiblo, 2,:nrl so tl.10 appollo..nt. cmmot ro·scind. it. Tho Morey Stool & Iron case le.id down c:1. gonoral principle~ and that principle, in is to be _fo_uncytho worcls of Lorcl. 312.ckburn. Ho sto.tod, 11t pago 443: "Whore· thoro is e, contrn.ct in which thoro arc two partios railuro to porforo ono ?~rt of it goos to tho. root of tho contrac_t 9 goos to t:,.o founda-Ho:ri of tho whol~, it is a good dof~:mco to say, ."I ai.1 not 5oing on to porf orn Ti'(! part of it vib.on ,.tl1e. t wh:j,cb. is t)::.o

root of· t~o who lo .and. tho oubs te,nticJ. ' t considora.tion for cy·por£ornanco :is dofontod by your ·_nirc.onducte Tho cour~ thor9 c.lso stc.tod that tl:i.J bran.ch of ono stipulation docs not moo <1sclrily. C-?.rry with it ovan an implicc{tion of tm intpntion to ropud.ia, to -;:.ho ·,Hul.:i .contrc.ct~ A n::>ro :omightonirig statcnont on this point is to bo found in CBITI1Y ON CO:N1IRJ.CTS., Tb.ore it is stated.~ o.t )Q(.;:::: ·:245.0· 3 .'~~f there is r. distinct refusal by om party to bo bound by tho contrc.ct in futuro 7 tho otlJ.or party may treat tho contract as ~t an end. Short of 1 rofusal, th:) principlo is to accertain whetho!: tho action of tho iiroo.kor is sucli as to enti tlo tb. o otl.lor part7 to conclude that tho brcakor !e lon;<j)r int.ands to bo bound by its provisions• For t.'.is :n:;_:.~::·::is1.• t: _s; f::,,iluro to ::;iorforn oust defeat tho w:1010 object of tho contract so as to ar.iount to a cor:1plo to ro:m:Uc, tfon by fao party in dofaul t of his oblig2.tions under it. 11 '!ho loa:rnod autl::.or go,Js om "It is tho i::oro difficult, howcvor, to infer t:.et a broach roprosonts conploto ro~ud.iation of a contract t:::.o furtl:or tho pc..rtios have procooded. wi tl1 t~:..0 porfor1:12.nco of it. 11 . (~phasi~"'"supplied). In .}:b.O present case 9 at ono stagu, an instnloont was dela;red by nor:J t:..r1n a nontb. 9 anc. noi thor party coL1.plainocl.

1'.. fow clays boforo tllo fourth instcluont was clue, t 1.,.e pmtios, as founcl by tLo trial court, arit rig:i:tly so in oy vi:)w, agroocl that faoro bo an extension of tiuo so thn.t botl1 -~10 fourt:1 and fiftl: instalments be paicl on tho cl.ate t'.:~o fifth instalnont foll duo~ that is, on 30tl: July, 1986. Clearly, thoroforo f it cc.m10 t, in reason, bo said that tho respondent's failure_. to po,y t::,.J f-=.rt,1..r"c'.1 i;:):3t:'..li:1ont in tine nnountoc1 t7a distinct rofusal by tho rosponclont to be bounc. 1)3T t110 contract in future. On th~ contra.ry, it was an expression t:v: t t: . ~ :ci:-iJ.~tios still consic~oroc: t~orasol vcs bound by t!:..oir contract. Thon thoro is tl:o s ta/30 to wl:;.icb. tb.0 rosponclcnt had procoodod wit::. t~~o porforraanco of tho contract on his po.rt: ho had paid r:ioro tan !lalf of -~-_:., contractual sum:i and roasorobly wi t::..in tho agreocl periods, ~ stn. toa. ir:. J...NSOlPS L:,.W OF CONTRL.CT, at pagD 346: "T'..10 best illustrations of divisiblo prooisos n.re to bo founcl in contracts to recoivo ancl pay for goods by instalnonts. W~.1oro those aro · numerous, an1 extond ovor a lon3 tine, a default ·either of deli vory or pa.ynont doos not nocossa.rily discharge tho contract ••• 11 ...,; 4 _On tho bo.sis of tho forogoing principlos 9 t'.20 conluct of tho l)artios, ,.. ~hoir rospoctivo merits, an:l all tho circurnstancos of tho

cas'o 9 I an q_uito ... cloar in ~.ni.ncl tho. t the failure b;,· tho rospondont to pay tho fourt;.1. . i11Sto.lnont on tl:;.o duo dato (lid. not consti tuto a. fun:lar:iontal. torn w:.1io:: wont to tho root of t!:-o c0ntr2,ct so as to justifJ roscission· of tho ···contract botwoon tho parties e For thoso roasons 9 tU.s appoal fails ant so is l:oroby dismissoc1o JUDGillo Juclgmont doli vorocl at Tabora in tlio absonco of t:10 parties tl:..i s _21-;tl:i.· d~Yt of Do conbor,. 1989 • l<t·~.,- ., " ·,) •.?>~, f: .•• f ... J •'" f ) , . , .•,. .,· JU

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Morey Steel & Iron Co. v. Yiu (1884) 9 App. Cas. 434

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