SGA SECURITY TANZANIA LTD VS SUMMER ESTATES LTD2

THE UNITED REPUBLIC OF TANZANIA

JUDICIARY

IN THE HIGH COURT OF TANZANIA MBEYA SUB – REGISTRY

AT MBEYA CIVIL APPEAL NO. 8480 OF 2024 CASE REFERENCE NO. 202404181000008480 (originating from Civil Case No. 21 of 2023 in the district court of Mbeya) SGA SECURITY TANZANIA LIMITED ..................................... APPELLANT

VERSUS SUMMER ESTATE COMPANY LIMITED .............................. RESPONDENT

JUDGMENT 28th August & 26th November 2024 NONGWA, J. In the district court of Mbeya vide Civil Case No. 21 of 2023, the respondent filed a small claim for specific damages of TZS 69,161, 993/= against the appellant. She was awarded TZS 45,161,193/= by the trial court. Briefly, parties executed a security agreement whereby the appellant had to provide security service to the respondent’s compounds located at Sae and Kadege within the city and region of Mbeya. The appellant employed some persons to perform the contract. On 27/4/2021 and 4/5/2021 theft occurred at Sae and Kadege where grader cylinder and a clutch server of the motor vehicles owned by Milo Group parked at the respondent compound was stolen. The appellant 1 was informed, police notified, the appellant’s employees who were on duty, Athuman Maziku and Sadiki Mwakakango were arrested, charged, tried, convicted and sentenced. The respondent made claim for the purchase of the stolen items, they searched for the price but when it was presented to the appellant failed to pay. The respondent had to recover by way of a suit, he presented a claim of TZS. 69, 161, 993/= being specific damage, general damage and other ancillary reliefs. The appellant disputed the claim and stated that the contract did not cover third parties. At the end of trial, the court was satisfied the respondent had proved her case and awarded TZS

45,161,993/= as specific damage, TZS 15,000,000/= as general damages and the court interest rate of 12%. The decision has aggrieved the appellant in the memorandum of appeal has raised eight grounds of appeal namely one, the honourable trial magistrate grossly erred in law and fact by his failure to consider that the Appellant’s liability for any loss incurred by the respondent herein was subject to the terms and conditions set out in exhibit “P1”, which is the contract between the parties; two, that the honourable trial magistrate grossly erred in law and fact by his failure to consider that Milo Group Limited had a comprehensive insurance contract to 2 indemnify if they incurred any loss; three, that the trial court erred in law and fact in holding that the appellant was responsible on stolen property owned by Milo Group while the Appellant had no contract with Milo Group Limited; four, that the trial courts erred in law and fact by relying in criminal cases No 76/2021and No 61/20221,”P3”, in delivering its judgment while the Appellant was not a party in those cases; five, that the trial court erred in law and fact failing to properly analyze and evaluate the contents of “P5” the Tax invoice and Electronic Fiscal Receipt (EFD) resulting to grant of special damage of Tsh 45,161,993 without being proved; six, that the trial Court erred in law and fact to hold that the Appellant

breached the contract while the respondent failed to prove in balance of probability; seven, that honorable magistrate erred in law and fact by giving two interests of 12% per annum and 6% per annum and without giving any reason(s) and eight, that the trial court erred both in law and fact when it failed properly to consider and correctly evaluate or assess the evidence adduced by PW1 and PW2 before the trial court When the appeal came on for hearing Ms. Janeth Aden and Ms. Jenifa Silomba, both learned counsels appeared representing the appellant and respondent respectively. Disposal of the appeal took the form of filing written submissions, parties complied with the scheduling order. 3 Ms. Janeth on the first ground submitted that in contract exhibit P1 or D1 under clause 5.5 It was agreed that any incident was to be reported to police and substantiated by report abstract. She contended that the respondent did not comply with the contract and the magistrate relied on criminal cases filed in court, in which it was also clear is the police abstract report was tendered. He argued parties are bound by contract they freely agreed. He supported the argument with the case of Univeler Tanzania Ltd vs Benedict Mkasa Trading As Bema Enterprises, Civil Appeal No. 41 of 2009 [2009] TZCA 24 (3 March 2009; TanzLII). She rounded his submission on this ground that in absence of the police

abstract report, it is the respondent who breached the contract. With respect to the second ground, it was submitted that Milo company vehicle had compressive cover with insurance company and it is where she was supposed to claim. She said in exhibit P1 or D1 it was clear under clause 5.3 that the appellant was not insurance company. The respondent’s claim for compensation to lead to double payment as Milo might approach the insurance company for indemnification. She fortified the point with the case of Alliance Insurance Corporation Limited vs Arusha Art Limited, Civil Appeal No. 297 of 2017 [2021] TZCA 126 (19 April 2021; TanzLII) 4 Submitting in ground three, Ms. Janeth stated that the appellant had no any contractual agreement with Milo company. That the appellant could not guard each and every property found in the respondent’s compound. He restated that Milo was supposed to approach the insurer. In ground four, it was submitted that the trial court erred to rely on exhibit P3 to which the appellant was not a party. He said in that case Athuman Maziku and Sadiki Mwakakango, the appellant’s employees were charged and the appellant was not notified of the cases. Further that the amount mentioned in exhibit P3 differs with the claim in the instant case. Taking on ground five, it was submitted that invoices, exhibit P5 was not scrutinised properly and did not prove TZS

45,161,193/=, the case of Zuberi Augustino vs Anicent Mugabe [1992] TLR 137 was cited in that specific damage must be specifically pleaded and proved. Counsel argued that while PW1 said service was done on 28/4/2024 exhibit P5 was issued on 28/4/2023. He contended exhibit P5 was not a proof of payment. He referred the court to second schedule of the Income Tax (Electronic Fiscal Device) Regulation, 2012 which prescribes contents of tax invoice. That as the respondent failed to prove specific damage, she was not entitled to general damage. She supported the 5 stance with the case of Kinondoni Municipal Council & Another vs Oysterbay Villa Limited, Civil Appeal No. 152 of 2022 [2024] TZCA 378 (21 May 2024; TanzLII). Six ground was that the respondent failed to prove her case on balance of probability as required by section 110 of the Evidence Act. She said oral evidence and exhibit tendered by the respondent did not match the claim. On interest in ground seven, Ms. Janeth referred to section 29 and order XX1 rule 21(1) of the Civil Procedure Code which prescribed interest to be charged. She contended in this case there was no any agreement as to interest between the parties. She thus faults the magistrate to award interest of 12% from the date of institution of the case to judgment and 6% from date of judgment to full payment. Last is that parties are bound by pleadings. He

stated while in the plant it was stated breach started in 2019, exhibit P3 shows cases were instituted in 2021 and also testified by PW1 and PW2. It was further submitted that there was different on the claim vide demand letter exhibit D4 and the one filed in court. Responding Ms. Jenifa submitted that in exhibit P1 in clause 5.1 the appellant was responsible for all loss as parties are bound by the contract. she referred to section 37 of the Law of Contract Act and the 6 case of Fikiria Richard Mwasenga vs Yohana Adam Kalonge &another, Civil Appeal No. 1 of 2021 [2022] TZHC 438 (7 February 2022; TanzLII). She added the respondent proved the case as per the case of Paulina Samson Ndawavya vs Theresia Thomasi Madaha, Civil Appeal No. 45 of 2017 [2019] TZCA 453 (11 December 2019; TanzLII). On complaint that the respondent was to claim from the insurer it was submitted that insurance does not cover every event even those caused by negligence of the ensured. He referred the court to the case of Harse vs Pearl Life Insurance Co. Ltd [1904]1 KB 558. Counsel submitted the claim by the respondent did not intend to benefit from the appellant and the insurer. She said having insurance cover do not relive another party from liability. In third ground it was submitted that by the appellant entering into security contract with the respondent was responsible for all properties in the

respondent’s premises including those instructed by Milo to the respondent. That there was not dispute that Milo left his property to the respondent then the appellant was responsible for security. On argument that the appellant was not party to criminal cases, exhibit P3, Ms. Silomba submitted that the appellant was vicarious liable 7 to acts committed by her employees. She fortified the argument with the case of K. K. Security Tanzania Limited vs Richard John Buswelu, HC Civil Appeal No. 73 of 2020 [2021] TZHC 5939 (27 August 2021; TanzLII) that as the said Athuman Maziku and Sadiki Mwakakango agreed to be employee of the appellant and to have committed the offence, the appellant was liable to compensate the respondent. The court was referred to the case of Seif Ally Mateke vs Ahmed Athuman & Others, Civil Case No. 201 of 2016 [2022] TZHC 11923 (12 August 2022; TanzLII). I have considered the record and rival submissions of the parties. the only issue for my determination is whether respondent proved the claim. From the record some of the undisputed issues are one, that there was contract between the litigants on provision of security, two, that theft occurred at the respondent’ premises which was to be guided by the appellant; three, that during theft some of the properties were stolen; and four, that the appellant employee who were responsible to guide the respondent’s

premises were charged and convicted of criminal offence for negligence at work place per exhibit P3. The only epicentre of the dispute is whether the respondent proved liability of the appellant. 8 In the submission, Ms. Janeth referred to clause 5.5 of the contract, which was admitted as exhibit P1 and D1 that liability of the appellant was conditional upon the respondent reporting to police and obtaining police abstract. She submitted that the respondent did not report and no police abstract was tendered. In contrast Ms. Silomba referred to clause 5.1 of exhibit P1 which explain liability of the appellant. Per evidence in record through PW1 the appellant’s officials were informed of theft incident, they went to the scene and witnessed what transpired. Further it was clear that police were notified, inspected scene and discovered that vehicle parts were stolen. As the result security guards were arrested, and later charged and convicted. The appellant did not dispute that was notified of the incidents and police were notified and involved in the process. Their only dispute is that they were not given police abstract as required by the contract. From the above, I had to look what is police abstract, in the first place there is no such term under the police laws in Tanzania. Nonetheless it is a Police Clearance Certificate its purpose is to verify that a person or entity has met

certain requirement or has no outstanding liability or obligations. At hand there is no dispute that the police were notified, upon investigation they charged the appellant’s 9 employee who were finally convicted and sentenced, this was substantiated by judgments in Criminal Case No. 21 of 2012 and No. 76 of 2021 which was admitted as exhibit P3. On those circumstance, I don’t see the relevance of police abstract as contended by the appellant. Given evidence on PW1 and DW1 it was proven that the police were informed, making claim on availing police abstract insignificant. There is a claim that the respondent was supposed to claim from the insurance company for the alleged loss. While I agree that the appellant was not the insurance company, that is not the reason to absorb from the liability otherwise the purpose and essence of entering into such contract would be defeated. Clause 5.4 of exhibit P1 and D1 provides; ‘The company shall accept any liability only in event that such loss or damage is proved to have been caused directly by negligence or wilful default of the company or its employee in performance of their duties the maximum compensation shall be the aggregate of ten per centum of the contract value per annual. The liability of the company or its servants or its agents herein under shall not on any ground or under any circumstances extended to any consequential or

indirect loss sustained by the client or any other person whosoever arising.’ With the above the appellant committed himself to be liable for any loss which will be proved to have been caused by negligence of her 10 employee. Exhibit P3 shows the employee were convicted by the offence of negligent at work place, on those circumstance the appellant is liable. In the case of Robert Mhando & Another vs The Registered Trustees of ST. Augustine University of Tanzania, Civil Appeal No. 44 of 2020 [2023] TZCA 65 (24 February 2023; TanzLII) the court stated; ‘Vicarious liability is a rule of law which imposes strict liability on the employer for the wrongdoings of their employees. Under this rule, an employer may be held liable for any wrongful act or omission committed while the employee is performing his duties if it is shown that, the employee's wrongdoings were closely connected with the acts he was authorised to do.’ From that stand point, the respondents cannot be heard to dissociate herself from the wrongdoings of her employee and throw liability to insurance company. Following conviction of Athuman Maziku and Sadiki Mwakakango for negligence liability of the appellant against the respondent was proved. The appellant just relied on single clause leaving aside other contents. It is the law that the document must be ready as a whole and not separate clause. See Abraham

Israel Shuma Muro vs National Institute for Medical Research & Another, Civil Appeal No. 68 of 2020 [2021] TZCA 183 (7 May 2021; TanzLII). 11 Connected with the above, the appellant disassociated to liability on ground that had no any contract with Milo group. Perusing exhibit P1 or D1 there is no any clause which exonerated the appellant from properties of third party parked in the compounds mentioned in the contract. That was purposely based on the nature of business of the respondent that is garage and gas station and the service the appellant was offered to render, the appellant was aware that he was to provide security to third party property found in the premises. Coming to whether the amount claimed was proved. The claim of the respondent was in form of specific damage, the law on specific damages is that must be specifically pleaded and strictly proved. See Zuberi Augustino vs Anicet Mugabe [1992] TLR 137. In this case the appellant pleaded TZS 45,161,993/= as purchase price of the stolen items. PW1 testified after the incidents they met the appellant to ascertain the exactly price of the stolen items, they agreed to search for the actual value of the spare and got cylinder of motor-vehicle grader worth TZS 30,650, 000/= and TZS 14,500,000/=. When the price as communicated to the respondent, they gave permission to purchase those items and be fixed on that equipment so

that the machines will keep on operating for the purpose of avoiding loss. This evidence was not controverted by the appellant during cross examination. PW2 presented tax invoices which was admitted as exhibit P5 without 12 objection from the appellant. It is settled law that the contents of an exhibit which was admitted without any objection from the appellant, were effectually proved on account of failure to raise an objection at the time of its admission in the evidence. See Eupharacie Mathew Rimisho t/a Emari Provision Store & Another vs Tema Enterprises Limited & Another, Civil Appeal No. 270 of 2018 [2023] TZCA 102 (13 March 2023; TanzLII). Going through evidence of the appellant the real dispute is on the amount used to purchase the stolen equipment. Purchase of clutch server were supported by tax invoice No 7101100900 bearing TZS 14,561,993/ and motor grader cylinder at TZS 30,600,000/=. This being specific damage after considering the pleadings and evidence both oral and documentary, find nothing to fault the conclusion reached by the trial magistrate, it was based on proper and critical analysis of evidence of both parties. Coming to interest, this will not detain me much as the law under section 29 and order XX rule 21(1) of the Civil Procedure Code permit to grant interest at the court rate not exceed 12%. The argument that it was not part of their agreement would

be relevant if the respondent was awarded interest at the commercial rate and from the date of breach of the contract which is not the case here. After going through the 13 judgment, I have found the trial court did not give reason for awarding maximum interest rate. In that sense, the same is reduced to 7% per annum from the date of judgment to full satisfaction of a decree. In the upshot the appeal lacks merits and is hereby dismissed with costs save for variation of interest rate specified above. V.M. NONGWA

JUDGE 26/11/2024 Dated and Delivered at Mbeya this 26th November 2024 in presence of Mr. Ntegwa Mpinyagwa holding brief of Ms. Jenifa Silomba counsel for the for Respondent. V.M. NONGWA

JUDGE 14