20100302 TZCA Dar es Salaam

/ IN THE COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM (CORAM: KILEO, J.A, MBAROUK, J.A And MANDIA, J.A:) CIVIL APPEAL NO. 32 OF 2009 SAVINGS AND FINANCE COMMERCIAL BANK LIMITED ••••••.••.•••••••••••••••••••••••••••••••••• APPELLANT < VERSUS ~ 1. BALBIR SINGH SAINI 2. PARVEEN BALA SAINI 3. BHARYA ENGINEERING AND .••••.•.•••••••• RESPONDENTS CONTRACTING COMPANY LIMITED (Appeal from the decision of the High Court of Tanzania at Dar es Salaam) . ( Werema, J.) dated the 12th day of February, 2009 in Commercial case No. 83 of 2006 JUDGMENT OF THE COURT 24th November, 2009 & 1st April, 2010 MBAROUK, J.A.: The appellant, Savings and Finance Commercial Bank Limited, lodged this appeal to challenge the decision of the High Court of Tanzania, Commercial Division in Commercial Case No. 83 of 2006 before Werema, J. (as he then was). l. 2 For the purposes of our decision )in the matter, it is necessary to give briefly the following background! At the trial court, it was alleged I ii that sometime in November, 2004, the appellant unlawfully withheld I . ,' st nd the 1 and 2 Respondent's moni.es deposited in their accounts Ii numbered 0001000422260080 and 0001000422260081 and used the I sum as a lien for the financial credjt facility issued to a third party I I without the consent of the 1 and 2n1 Respondents. Further to that, it st I . 1, was alleged that a sum of USD 10,430 was withheld in A/C No. 0001000422260081 and a. sum if ,, shillings 89,000,000/= was withheld from A/C No. 0001000 422260080.. The 1st and 2nd 1 I Respondents suit at the High Court Commercial Division was for the l I following prayers: I (a) That the defe~dant be ord~red to release the principal sum ji withheld from both accoun~; (b) That the defendant be ordered to pay interest at the rate of I 25% for the money withhJld from each account from the I I! date of attachment to the date of full payment; 'J ' .. 3 (c) That the defendant be order~d to pay interest at the rate ,of 1; ,, . /' 25% for the money withheld from each account from the , I I I date of judgment to the date of final payment; 1 ; i I, i, ,I '1 ( d) That the Court award p!unitive damages against the · ' i 1 defendant for negligence an~ for breach of professional duty of care to the plaintiffs. A Jum of shillings 20,000,000/,,; is . 11 ', demanded on this head; /1 < Ii I: ' (e) That the defendant be ordered to pay a sum of shillings i 1, 100,000,000/= as general damages for financial difficulties I and psychological suffering~ that the plaintiffs experien'Ced i . .. . . I .. · for the whole period that ~he defendant had withheld the . .I . . i' accounts unlawfully and without just cause; 1, II I; (f) That costs follow the event/in favour of the plaintiffs; and 11 r 11 , (g) That the Court be pleased ito grant any other order or relief that may deem fit to grant) . . 1: ,I ,,i! Ii I' Ii ,, ,' '.: 4 , Ii 11 i 1: I The High Court gave judgment ih favour of the respondents and . ordered that:- "(1) The plaintiffs are awarded T.Shs. 10,000,000/= as punitive damages; (2) The sum of T.Shs. 20,00b,000/= as general damages in I: ! favour of the plaintiffs; I (3) The amounts will attract idterest at the court rate of 12 per I I centum from the date. o~ judgment to !he date of final payment; (4) Further, the defendant bank is ordered to release the Ii principal sum of the money withheld from both accounts as ' i prayed in the plaint; I . I: (5) The amount will be paid II with interest -at the rate of 20 i . I percentum from the date 9f wrongful debit or attachment of i the accounts to the date of' final payment; ' i t I 5 (6) The case against the third party is dismissed." II i Being aggrieved by that decision; 1 the appe_llant has preferred this appeal. .I . ; In this appeal, Mr. Dilip Kesaria, l~arned advocate represented the I, I appellant, whereas Mr. Joseph Ngiloi and Mr. A. Semu jointly, i' I' ' represented the 1st and 2nd Respondents. I Mr. Yuda . Tadei represented I . rd the 3 Respondent. !· The memorandum of appeal contained the following grounds of appeal, namely:- i :I ( . . 1. The learned Judge erredI , in determining that the first I: respondent did not execute a lien in favour of the I,'i I 1 appellant to secure loa ns and advances to the third 11 respondent; I . 2. The learned Judge erred in determining that ·even if the r I lien was executed by the first Respondent, it was unenforceable and set aside; f, I ' . 6 3. The learned Judge erred in awarding general and punitive damages to the first and second Respondents totaling T.shs. 30,000,000/= against the Appellant; 4. The learned Judge erred in awarding interest at 20% per annum without explanation and without regard to the interest rates prevailing for savings Account; 5. The learned Judge erred in dismissing the Third party claim against the third Respondent despite clear admission of benefit received by the third Respondent; 6. The learned Judge erred in awarding costs of the suit to the Respondents. At the hearing, Mr. Kesaria started his submission of the 1st ground of appeal by posing a question whether there was a lawful lien. He said, the document marked as Exhibit P2 was the one relied upon by the appellant as a lien document. Mr. Kesaria submitted that two expert witnesses were called to testify in court, one for the 1st and 2nd Respondents (the plaintiffs) and another one for the .: t I • 7 I appellant (the defendant). PW1, In~pector Hamad Hamis Hama di I, . l! (witness for the 1st and 2nd Respo~dents) testified as a forensic i . ' i! expert and his findings were believedj by the trial court. Whereas DW 1 I' . I 3 inspector Masoud Gumbo, (witness for the appellant) who identified I . himself as a handwriting expert whd retired on 5th June, 2007, his I, I' findings were not believed by the tri rl court. Mr. Kesaria submitted 1 i that PW1 was supposed to compbre the signature in the lien . I, 1, I document (Exhibit PP2) with that in 1the "Account Opening Form" at 1, !i the Bank. He said, comparing the sig8ature in the lien document with 1, I other documents like passport was /hot a proper way leading to a 1 j! correct finding that the signature fo~nd in a lien document was that 11 st of the 1 Respondent. Mr. Kesaria jJurther submitted that the trial court was left with two conflicting ~andwriting reports in respect of I !, the signature of the 1st Respondent ·bn the lien document. He urged I i us to fault the learned trial judge for favouring the report of PW1 as I: I the report failed to compare a vital Jiece of evidence of the "Accou~t 1, . 11 • I . st opening Form". He then invited the i:Court to allow the 1 ground of , I: • "I appeal after the trial Judge him~elf admitted -that the relevant I, 8 signature would have been the specimen signatures found in the bank card. On his part, Mr. Semu, briefly submitted that the trial Judge correctly denied to accept the handwriting report written by DW3 inspector Masoud Gumbo. He said this is because the report made by DW3 bore no date and name of the author and further contended that DW 3 was not an authorized bureau officer, because he was not working in the section at that time. For that reason, he said, there was no way the trial Judge could have relied on the report written by an unauthorized officer. In support of his argument he cited the case of Three River District Council & Others V. Bank of England [1996] ALL E.R volume 3. He then prayed for the dismissal of the 1st ground of appeal. There is no dispute that the record of appeal contains two conflicting handwriting expert reports on the authenticity of the signature of the 1st Respondent found in the lien document. The trial Judge favoured the report written by PW1 inspector Hamad Hamis Hamadi on the balance of probabity. However, the report written by 9 DW 3 inspector Masoud Gumbo was rejected for the reason that, it does not contain office file reference number and that it bears no date on which it was made. Another reason was that the report written by DW3 failed to follow the chain of command and discipline of the distribution of work in a police bureau. Being a Gazetted Officer, we are of the considered opinion that DW3's report was admissible. On the other hand, we agree with Mr. Kesaira that PW1 ought to have compared the signature in the lien document with that found in the bank card. This view was also supported by the trial Judge when he examined the report of inspector Hamad (PW1) where he stated: "The common denominator of documents with signatures subjected to the experts is the examination in EXH D1 and the one in the passport. I think for purposes of banking, the relevant signature would have been the specimen signatures on the bank card. These 10 I I 1' I' were not examined by Inspector Hamad. (Emphasis a~ded.) :1 ,I I: ,I The failure of PW1 to have conibared the signature in the lien I I document with that found in the bank); card, makes the report written i by Inspector Hamad (PW1) questiq,nable in its authenticity. The .,11 report of DW3 Inspector. Gumbo seetpis t.o have some problems too ,II' as indicated, hence the probative value of the report written by DW3 · . I· I . st is reduced. That makes the evidence'. to connect the 1 Respondent 1 j with the signing of the lien document Jbf little value. As pointed out earlier, the two; experts at the trial court were 1, 1 contradictory even if they were from! the same bureau. We think the Ii trial judge should have accepted both or rejected .both. 1 Having established that the eyidence found in the two expert I, • i reports was questionable, can we saf with certainity that there is any i, evidence to connect the 1st Respondent in executing the lien () :II 11 i . . I I ' document ? It is our considered opinion that there is none. In the event, we dismiss the 1st ground of app~al. II I st Having dismissed the 1 ground bf appeal we consider it futile ,: to embark on a discourse of the second ground of appeal. - ;I 1 ! . ' 1 As to the 3rd ground of appeal, M, r. Kesaria submitted that, as a 1: matter of law, damages must be pleaded and proved. He said, there j . i is no doubt that the respondents pleaded for damages in their plaint. However, the respondents failed to p~ove on the issue of damages. He contended that, neither punitiv~: nor general damages were j! : proved. For not being proved, he ur4ed the Court to allow the 3rd I ground of appeal. ! -I - - :I I, ' On his part, Mr. Semu submitte,d that the trial Judge ~orrectly relied upon the principle of restitutiJn when he awarded damages :I - totaling T.Shs. 30,000,000/= Mr. Semµ submitted that at page 105 of ' ! . the typed record there is proof of the damages when the ,, ist Respondent stated that "it made me/l poor this bank". In support of I i 12 . : I . his argument Mr. Semu cited to us tt)e decision in the case of Patel !j: v. National and Grind lays Bank Ltd [1969] I EA 76. ' i In the instant case, the 1st ~nd 2nd Respondents claimed li . I .. . damages after the appellant unlawfully withheld monies deposited in their accounts and used them as a Ji~n for the financial credit facility I, . . issued to a third party. The respondedts claimed T.Shs. 20,000,000/= I . .,ii as punitive damages and T.Shs. 100,·qoo,ooo/= as general damages. I' . . ·11I I I ' :/ There is no doubt that both types of damages (punitive and ,, general) have been pleaded in the ~laint. As for punitive damages, . I:! the Black's Law Dictionary (8th Edition) defines it as: I - ''Damages awarded in \ addition to actual ' i, damages· when the defendant acted with I, . 11 recklessness, malice, or deceit;" I' When awarding punitive the trial Judge in his judgment stated that: 13 '. I Ii ''It is a major finding of , I this court that the 11 defendant bank acted contrary to prudent banking : I I principles by acting in breac/11 of its obligations; and . . I i . doing so · without reasonable t care and without ' i exercising reasonable skills of a banker. The ' j, conduct is deplorable reqJiring a commensurate Ii persionary punishment. The amount claimed here is 11 11 not much for such a deplor1ble conduct but I think in the circumstances a suJ of Shs. 10/000/000/= will be aappropriate reprimahd from this Court. " I I This Court is aware that the source of the problem found in this i · case is a lien document purported toj be sent to the bank by the ~ st 1 , I Respondent. Though we found in the i:1 st ·ground of appeal that it was not established that the 1st Respondbnt executed the lien; we find . I, however that there was no justificatioh in awarding punitive damages I . Ji especially considering that there was Ina evidence of malice or deceit I. : i on the part of the appellant. . I : i· 14 th As for general damages, the Black's Law Dictionary (8 Edition) defines the term as: "Damages that the law presumes follow from the type of wrong complained of .... ....... .... General damages do not need to be specifically claimed. " This Court further elaborated the term general damages in the case of Dr. Ally Shabhay v. Tanga Bohara lamat, Civil Appeal No. 40 of 1997 (unreported) by stating that: "These are damages arising natural/½ that i~ in the normal course of things. They are such damages as the law will presume to be the direct or probable consequence of the action complained of.,, Lord Dunedin in the case of Admiralty Commissioners v. S.S. Susquehanna [1926] A.C. 655 at p. 661 stated that: 15 ''If damage be general, then it must be averred that such damage has seen suffered'~ However, we on our part are of the opinion that, what amounts to a sufficient averment will depend on the facts of the particular case. As pointed out earlier the 1st and 2nd Respondents (Original Plaintiffs) prayed in paragraph 12(v) of their plaint for general. damages after having financial difficulties and psychological suffering suffered by the plaintiffs for the whole period the appellant withheld their accounts. In the instant case, the basis used by the trial judge to allow general damages to the 1st and 2nd Respondent, is to the effect that they must have had mental anguish after having found that their joint accounts were depleted. We too are of the opinion that, according to the principle laid down in awarding general damages as shown herein above, the 1st and 2nd Respondents have to be paid such damages. .17 Also see, the decision of this .'court in The Cooper Motors I . . Corporation Ltd. v. Moshi/ ArusHa occupational Health, Civil 1' Appeal No. 1 of 1990 (unreported)'1 on the issue of assement of . I damages. I In the circumstances of this case I we see no reason to differ: or I intervene on the assessment made tiy I the trial judge on the amount . II awarded to the plaintiffs. But· the qdestion is who is the one to pay such damages. Is it the appellant (the bank) or the Third Party (3 rd .I Respondent) who has not dispute1 that he received the money . I l deposited into his account. Also the ~rd Respondent has not denied to Ii !1 1, 1 have benefited from the transaction of the amount credited into his account. . . .. This matter has . exercised our minds ' greatly, but at the end we 1, I have reached to a considered opini~n that, it will be just and fair if . ' the general damages are split between the appellant and the· 3rd I i I . . Respondent. We have arrived to that conclusion after having !I . j . st dismissed the 1 ground of appeal. ©ur minds direct us that to some l . I extent the appellant (the. Bank) is:i liable for having committed a !1 l l 18 mistake after withholding the 1st and 2nd Respondents accounts ! leading to financial and psycholdgical suffering. The mistake . I I committed by the appellant is agains~ the banking prqcedures, hence cannot escape the blame. In the ci~c,Lmstance, the appellant and 3rd 11 .1 Respondent each should pay 10,000,000/= as general damages. ,I Ii . I ,; As .for the 4th ground of appeal, Mr. Kesaria briefly and I concisely submitted that no explanation I was given by the learned ' I I, II Judge when he awarded interest at 20% per annum. In support of 11 i: his argument he cited the case of A~S. Sajan v. Cooperative and i 1: . Rural Development Bank [1991] iTLR 44 Mr. Kesaria· added that 11 ;I Fixed Deposit Account should have: been the basis of the interest to be awarded. On his part Mr. Semu contend~d that, account withheld by the I I appellant attracted commercial , ihterest. I! He added that the I, I' respondents' accounts were withheld . I by the appellant for four years . . i Hence, he said the trial judge wa~ right when he awarded 20% ,', interest. ...,, I ' 19 . We are of the considered opinion as per the 4th ground in the memorandum of appeal that the basis of the interest awarded should have relied on the savings account interests. Furthermore, no explanation was given by the learned Judge as to why he awarded 20% interest per annum. For that reason, the 4th ground of appeal is also allowed. The appellant and the 3rd Respondent shall equally be liable to pay such interest for savings account prevailing at the time of the transaction for the same reasons stated in our decision for the 3rd ground of appeal. As for the 5th ground of appeal, Mr. Yuda Tadei learned advocate for the third respondent readily conceded that the learned Judge erred in dismissing the Third party claim against the third respondent despite clear admission of benefit received by him. For clear admission of benefit received by the third respondent, we are of the opinion that the learned Judge erred in dismissing the Third Party claim against the third respondent. In the event, the 5th ground of appeal is allowed. For the avoidance of doubt, the 3rd 20 respondent is to return the principal amount deposited into its account to the 1st and 2nd respondents. As to the issue of costs as it appears in the 6th ground of · appeal, we are of the considered opinion that the Third party (3 rd Respondent) has not denied to have benefited from the transaction of the amount credited into his account. Having given the matter of costs due consideration, we are of the settled mind that they also ought to be borne equally between the appellant and 3rd Respondent. We order accordingly. DATED at DAR ES SALAAM this 2nd day of March, 2010 E.A. KILEO JUSTICE OF APPEAL M.S. MBAROUK JUSTICE OF APPEAL j.