200151001 TZHC Mwanza

IN THE HIGH COURT OF TANZANIA IN THE DISTRICT REGISTRY AT MWANZA HIGH COURT CIVIL APPEAL No. 37 OF 2014 -(Appeal from the Judgment of the Resident Mqgistrate Court of Mwanza Civil Case No. 5 of 2008) BETWEEN SAINT AUGUSTINE UNIVERSITY OF TANZANIA (SAUT) ..........................APPELLANT AND JOAN MARY JOHN MICHAEL ........... ~························RESPONDENT JUDGMENT JS1h September & JS' October, 2015. J. A. DE-MELLO, J; The Appellant is aggrieved and, thus dissatisfied with the findings and de~isions of the suit from .the Mwanza Resident ·Magistrate Court in Civil Case No. 5 of 2008. The Appeal has attracted four (4) grounds which are as follows; i. That, in the abSence of the evidence, th~ppellant compelled ·its ·.. stud.ents to refrain from taking ~ e r e d to them by . the '' 1 ,.I . It Respondent, the learned Trial Magistrate erred in holding that the 1 I I Appellant breached the term of the contract EXH .. P2. ii. That, the amount of TShs. 15,000,000/ = awarded to the Respondent in respect of loss of business being in the nature of the special damages was not proved by the respondent and the l~arned trial Magistrate er·red in awarding the same. iii. That, since the evidence availa_ble on record does not show that the Appellant breached the terms of the contract EXH P2, the learned trial Magistrate was not justified in awarding the Respondent the amount of TShs. 6,000,000/ = as General Damages for Breach of Contract. iv. That,- the Trial Court erred in law in a.warding interest of 9% on the Decretal sum per annum at Court rate while the same is . againstthe law. A brief background giving rise· to th·~ Appeal is what I terms as a 'souring relationship' between the A as an institution which engaged the 2 catering services of the Respondent for provision· of meals to its students. The Respondent Joan Mary J. Michael instituted a suit against the Appellant St, Augustine University of Tanzania (SAUT), allegedly for .'unlawfully termination' of the .contract for provision of meals to the students. The said termination, she further stated, affected a loan that she had secured from CRDB Bank Mwanza Branch to the tune of TShs. · 30;,000,000/ =. As security for the said loan, she. mortgaged her landed property situated at Plot No. 262 Block "J" Nyamanoro within Mwanza City. The facts further avers that, as. she had commenced and, progressing well, she received a 'Notice' from the Appellants as issued and published by the .Students Organization Government. The reasons being that, the food was unsatisfactory. The Trial Resident Court ruled out in favour of the Respondent ordering the following towarqs the Appeliant. i. The Appellant to pay TShs. 15,000,000/ "'."'" being loss of business. ii. TShs. 6,000,000/ = bein 3 iii. Interest of 9% on the Decretal sum at Court rate ) from the date of judgment till full payment. iv. Each part to bear their own costs. This is what has now aggrieved the Appellant and, thus this Appeal. To argue the present Appeal, is Nasimire Advocate assisted by Counsel . . Njel~a mean\:'fhile, it is Dennis Kahangwa the one fending for the Respondent. By consent, oral submissions was prayed and duly granted. Combining grounds number 1 & 2, Counsel Nasimire firmly maintained . that, without any clue of communication more so official, from the Appellant and, based on a mere 'Notice from the Student Organization', the Respondent hurriedly stopped servicing the canteen as a result of students boycotting the meals. True, he further conceded that, there was a ~eeting in which the students had convened and, attended by . both the Appellant's official one fr Mwaijonde and, the Respondent herself, whose resolution was to finally .be endorsed and communicat~d by the Institution. By holding that the Appellant unlawfully terminated the contract was wrong, consideringfthat there was no official communication \ . . . . · and, in writing to be submitted b~e Appellant. The. Respondent, without · any clue· qf justificatio~ and, r~~"Qwn accord _opted ~ut.. In fact, is ~~ . . . . • Counsel's final subrnissions that, the termination on the part of the ) Respondent, was premature and prior to the expi_ry of the existing contract, a month before,- to be precise. With regard to the 2 nd ground of his . . Appeal, Counsel Nasimire challenged how the Trial Court awarded TShs. 15,000,000/ = as 'loss of business' was reached by the Trial Magistrate. 'loss of business' being a tangible affair attracts and demands proper substantiation with records· and, receipts for proof, he further observed. In the absence of such and, citing the case of Bamprass Star Services Station Ltd vs. Fatuma Mwale (2000) TLR 390 of the need for 'Strict and Specific' pleading for the damage. On his part, Counsel focused his submissions on the 3rd an_d 4 th ground of Appeal that, in the absence of proof of 'Breach of Contract' on the part of the Appellant as alleged, the Trial Court erred both in law and, fact to award the Respondent TShs-. 6,000,000 / = as ~eneral damages for the . purported ·'Breach of Contract'. He drew the attention of the Court to paragraphs 9 & 10 of the. Plaint to fortify the ·argument the Notice issued was from the 'Students Organization' who was not party to the contract and, as such damages, g era I in nature could not accrue against. the Appellant. f interest rate of 9°/~ which had no 5 basis at all, considering the whole scenario above. However, it is 7% or less as opposed to 9%, if at all. In total rebuttal, Dennis Kahangwa, learned Advocate for the Respondent in combining ground No. 1 & 3 of the Appeal reiterated that it is not in dispute that the contract/agreement was between the two parties with the Students being beneficiaries of the ~ervices could not be excluded. That, true it is, the meeting was a re?ult of an official 'Notice' from the 'Student's Organization' and, which was presided over by an official of the Institution of the Appellant, the one who endorsed the contract. In the end, it was unanimously resolved that an official communication of the deliberations wouldshortlybe communicated to the Respondent something which never happened as anticipated todate. Counsel referred Exhibit P2 on paragraph 5 of the Plaint t_o fortify his argument that Parties included the University itself, Student Organization,· Afisa huduma &, Minister in charge of Students Welfare as part of that Managen:ient. This, he further stated, diffused or rather water down the lame excuse from the Appellant that the Notice that was issued by the 'Student Organization' ad no relevancy considering the fact that they wer~ not only benefi ut more so parti~s to contract. 6 On the TShs. 30,000,000/ == award, being 'loss of Business' Counsel was of the view that, it served the purpose to the generality. whose consideration is similar to. that of TShs. 15,000,000/ = based. on the discretion of tbe Court, judic;iously exercised. He safely then prayed for the dismissal of the Appeal, it lacking in merit. Costs to follow event he · reiterated. For easy determination of this Appeal I found it appropriate to frame three issues and as follows; t Whether there was a lawful and valid contract between the two parties? ii. . If the answer from the above is. in affirmative, whether it is the Appellant · or Respondent who . terminated the contract? iii. Whether ·the award of loss of business to the tune of TShs. 15,000~000/= was 1. j ~ny? · 7 iv. Whether the claim of TShs. 6,000,000/ = being general damages was lawful? I need not labour much in addressing the first issue as whether or not there was a valid contract between parties. It is evident and .quite vivid that it is a result of it, upon which this suit arose and, none of the parties is in controversy over it. In place and, annexed in the Plaint 'Mkataba wa Huduma za .Kafeteria SAUT Between Mzabuni .Joan . Mary J. Michael na Menejimenti ya Chuo kikuu cha SAUT ikiwakilishwa na Naibu Mkuu wa Chuo Utawala na Fedha Fr. Peter A. Mwajonde dated the 14th of September 2006· ·to commence from 25 th of September 2006 to 10th of July 2007. Of interest and, in support .of the Respondent's argument it is clause 5 reading that; 'Afisa Tawala Masuala ya Huduma za Chakula wake, pamoja na Waziri wa Chakula wa Seri ali ya Wanafunzi wa SAUT katika kufuatiiia na kut:enda kaz kwa began a mzabuni kufanikisha . 8 ... For academic purpose and, to fortify my position on the above I am ) inclined to borrow the definition of what a Contract is as captured from Black's law Dictionary 3 rd Edition to mean:- "A_ contract is a written or· oral legally-binding agreement between the parties identified - in the agreement to fulfill the terms and conditions . outlined . in the agreement. A prerequisite requirement for the enforcement of a contract, amongst other things, is the condition that the parties to the contract accept the terms of the claimed contract11 • It was tendered and, not objected as it was marked "Exhibit P2. True, the Student Organization among the three ot~ers as stipulated was part and parcel of the said management of which Fr. Mwajonde was representing all. This then disposes the first issue; In. addressing the 2 nd issue as to who then .terminated the same? Annexed in the Plaint is the NOTICE dated the 13th of March, 2007 from St. AUGUSTINE UNIVERSITY - OF TANZANIA STUDENTS ORGANIZATION (SAUTSO). In pali f that Notice clearly stipulates . . . . and,-·I find wise to borro , · . , 9 "About 88% of the students have shown total dissatisfaction with the services offered by TK Canteen Services at Nyegezi.ufollowing these results SAUTSO has reached a decision that TK has to leave . . the place. This was arrived during the meeting between SAUTSO, Staff and Tenderer with DVCAF who promised that the University• Management Board is the one which would give the final decision". (Underlined is my emphasis) What then is drawn from such Notice is that it was a 'Unamious' and 'Valid' one clearly and loud, which the SAUTSO as part of management as per clause 5 of the agreement (supra) and, in the presence of the Respondent herself the Caterer, that arrived in that decision. Students who are clients rather direct beneficiaries of the servlces were even warned not to continue with the meals lest it becomes of their own peril. In one of the Appellants argument was that until and, '-:}nless there was a firm official. communication- from management, then the Respondent had no reason to terminate services. In simple but logical analysis and, with student Notice, loud and clear enough, while cau 110ning students to boycott meals this · was none other· than termin~tion, am very -certain on this. The: . . Respondent had no o t h ~ · . n halt services as no student 10 was taking the meals following the warning. This is what the Notice further ended by stating; "While awaiting management decision·, students who take their meals at TK's Cafeteria should know that they are doing that at their own risk". The SAUTSO Government is of a view that all students who feel the service are not satisfactory to boycott it until further measures. What this all translates to is none other than 'Termination' and, from none other than the Appellant's Management in its entirety. This.is, with or without the wanting 'final decision' from the University Management. The Respondent received the message point clear and, for humanitarian and commercial reason she was right to put to end the services. To d~te as we speak, that final decision even after the expiry of the contract has not· been forthcoming. The conduct was self leading .. Now for the Reliefs. The Trial Court in response of the claims did award the Respondent two reliefs. One, is TS~s. 15,000,000/ = for loss of business and two, TShs. 6,000,000/ = as General Damages. In accordance with the Plai.nt, the Respondent ha the yers for Reliefs; 11 WHEREFORE: The Plaintiff prays for judgement against the Defendant for·I (i) The sum of TShs. 30,000,000/ = and TShs. 15,000,000/ = being loss of business and general damages. (ii) Interest both on item (i) above at 21 % p.a from the date it fell due till the date of filing this suit. (iii) Further interest on the decretal sum at 12% p.a from date of judgment till payment in full. (iv) Costs of the suit (v) Aby other reliefs that this Court deems fit It is undisputed and as reflected on record that TShs. 15m was sourced" and approved by CRDB Bank dated . the 6 th of May 2007, Titled "Application for Term loan Facility TShs' 30,000,000/=. The purpose of the loan was none other than that of; " ... support Catering services business at St Augustine University Campus at Nyegezi", as highlighted under item 2.0 of the Facility. The · loan would attract 18% interest rate p. . as gathered from clause 4.0 (supra). It is also apparent that th signed in May, 2006 the 12 9 th . A collateral in form of a legal mortgage was deposited as security on Plot Number 262 Block 'J' Nyamanoro Area in Mwanza City. What t~en does the law provides _for damages? It is the Appellant's · submissions that, the Trial Court ·was wrong· to award the amount disregarding the fact that nothing was substantiated with proof, strictly and, specifically pleaded. It is the case of Zuberi Augustino vs. Anicet Mugabe {1992} TLR 137 at page 139 amongst many others that laid down the rule holding inter alia that:- "It is the trite law· and we need not to cite. any authority, that special damages must be strictly and specifically pleaded and proved". Moreover, three principles were enunciated by Lord Wright in Davies vs. Powell Duffryn Associated Collieries ltd. ( 1942) AC 601 at page 617, in which Viscount Simon restated the same in Nance vs. British ·Columbia Electric Railway Co. ltd. (1951) AC 601. lord Pearson re stated at.I in Taylor vs. O'Connor (1971) AC 115 at page 140; "There are three stages in the- normal calculation, namely, (1) .......................... (no appropriate) (2) to estimate the lost pecuniary 13 ...,. ·benefit which the dependents probably would have ) derived from the ;ost earnings, and to express the lost benefit as an annual sum over the period of the lost earning; (3) to choose the appropriate multiplier which, when applied to the lost benefit expressed as an annual sum gives the amount of the _damage~, which 1s a lump sum". I agree, while the Respondent had TShs. 30,000,000/ = as her claim for 'Special Damages' as loss of business, there was and, still is, need for appropriate substantiation. As for General Damages, that is as the case .always is, discretionary upon the Court, judiciously exercised. The Respondent, is at a loss and, needs to be compensated, worse even when her anticipation and aspiration out of the business which were unceremoniously a·nd abruptly put to an-end. You might wish to recall however that, the contract for one year was just four . (4) months away prior to its expiry. It was as per the contract to expire ·on the 10th of July 2007 while the No· ice from the meeting was on the 13th of March 2007. For a daily meal to i ,..,..~,~ breakfast the Caterer was to · ~ 14 receive not more than TShs. 1,500/ =. See Exhibit P2 on 2nd item states ) as follow;- " Mzabu n i atalipa Tsh 1,500/ kutwa kwa kila mwanachuo halali hapa Saut kwa milo ya kifungua kinywa, chakula cha mchana. kuanzia saa 6 alasiri hadi saa 8:30 mchana na chakula cha jioni kuanzia saa 12:30 hadi saa 2:30 usiku. Aidha mzabuoi . atatakiwa asibadilishe kiwango hicho hadi mwisho wa mkataba.", Whether this was paid in cash upon service or not, is yet to be ascertained but, the assumption is it was not forthcoming at the tim_e she closed shop forcefully as a result of the Appellants decision. The four months in the. vacuum ought to be compensated and, based on the fact that a loan to that effect was·still running against her. The calculation would then be based on the· number of students taking the meals on daily basis, together with the price er day to each. The loan inclusive of its repacartion in terms of interest of 18% p.a, profit to· be accrued is ju .. _rinciple in . any 15 • i ; commercial transaction and had to be calculated and, duly } substantiated with interest at Commercial rates, of course. As for general· damages, it being discretionary, ·1 for one would not fault the ·wisdom of the Trial Magistrate more so when what was prayed was TShs. 15,500,000/= as opposed to TShs. 6,000,000/ = that was awarded. The Appeal . by large has no merit and, is dismissed accordingly let for the . special damages which require proper substantiation. Let it be· so to be substantiated for proof. · It is so ordered so as Costs is to follow event. _Judge 01/10/2015. 16