CIVIL APPEAL NO

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA ( CORAM: KEREFU. 3.A., FIKIRINI. 3.A. AND MASOUP, J.A.^ CIVIL APPEAL NO. 394 OF 2022 SINANI BUILDING CONTRACTORS LIMITED 1st a p p e l l a n t MOHAMED SAID SINANI 2nd APPELLANT ASMA MOHAMED SINANI 3rd APPELLANT VERSUS CRDB BANK PLC RESPONDENT (Appeal from the Decision of the High Court of Tanzania, Commercial Division at Dar es Salaam) (Kisanva, J,) Dated the 20th day of January, 2022 in Commercial Case No. 114 of 2020 JUDGMENT OF THE COURT 21st & 25th February ,2025 KEREFU, 3.A.: Before the High Court of Tanzania, Commercial Division, at Dar es Salaam, CRDB BANK PLC, the respondent herein, successfully sued SINANI BUILDING CONTRACTORS LIMITED, MOHAMED SAID SINANI and ASMA MOHAMED SINANI, the first, second and third respondents, jointly and severally for the breach of repayment of an overdraft facility to the tune of TZS 280,000,000.00 advanced to the first appellant and guaranteed by the second and third appellants through mortgage of their several landed properties namely, Plot No. 102 Block '3' Factory 1 area (Viwandani) Mtwara Township CT No. 22700 MTW, L.O. No. 3828672 belonged to the second appellant; Plot No. 165 Block T Kisota Temeke Municipality, CT No. 61085 MTW, L.O. No. 214142 and Plot No. 167 Block T Kisota Temeke Municipality, CT No. 60918 MTW, L. 0. No. 214141 both belonged to the third appellant. Therefore, in that suit, the respondent claimed for the following reliefs: (i) Payment of TZS 386,674,811.92 being the outstanding amount as at 17th March, 2021; (ii) Interest on (i) above at the rate o f 18.5% per annum from 17th March, 2021 to the date o f judgment; (Hi) Penalty on (i) above at the rate o f 3% per annum from 17th March, 2021 to the date o f judgment; and (iv) Interest on the decretal amount at the court's rate o f 7% from the date o f judgment until full and final payment In the alternative and following failure to pay the amount stated in (i), (ii), (iii) and (iv); (v) Appointment o f Ms. Linda Bosco Advocate as a receiver manager with powers to sell the landed mortgaged properties at Plot No. 102 Block '3' Factory area (Viwandani) Mtwara Township CT No. 22700 MTW, L.O. No. 3828672 belonged to the first appellant; Plot No. 165 Block T Kisota Temeke Municipality, CT No. 61085 MTW, L.O. No. 214142 and Plot No. 167 2 Block T K/sota Temeke Municipality, CT No. 60918 MTW, L. O. No. 214141 both belonged to the third appellant; (vi) An order against the 2nd and J d appellants to provide vacant possession over the properties mentioned in (v) above; (vii) Appointment o f Ms. Linda Bosco Advocate as a receiver and manager o f all the fixed assets o f the first appellant charged under the debenture; (viii) Costs o f the suit; and (ix) Any other reliefs which the court may deem fit to grant in favour o f the respondent In their joint written statement of defence, the appellants disputed the respondent's claims and prayed for the respondent's suit to be dismissed with costs. Having heard the parties and analyzed the evidence adduced before him, the learned trial Judge decided the case in favour of the respondent and the appellants were ordered to pay the following to the respondent: (i) The outstanding balance o f TZS 283,218,845.69; (ii) Interest o f 18.5% o f the decretal sum per annum from 17th March, 2021 to the date o fjudgment; (Hi) A penalty o f 3% o f the decretal sum from 17th March, 2021 from 17th March, 2021 to the date o fjudgment; and 3 (iv) Interest o f 7% o f the decretal sum from the date of judgment to the date o f full satisfaction o f the decree; Thereafter, the learned trial Judge stated that: "In view thereof, the appellants are given six months to pay the decretal sum and interest In the event o f failure to pay the money due within that period\ the alternative prayers in (v), (vi) and (vii) o f the amended plaint are hereby granted in respect o f the landed properties at Plot No. 165 Block T Kisota Temeke Municipality, CT No. 61085 MTW, L.O. No. 214142 and Plot No. 167 Block T Kisota Temeke Municipality, CT No. 60918 MTW, L. O. No. 214141." The above decision of the High Court prompted the appellants to lodge the current appeal to express their dissatisfaction. In the memorandum of appeal, the appellants raised eleven (11) grounds of complaints. However, for reasons that will shortly come to light, we do not deem it appropriate, for the purpose of this judgment, to reproduce them herein. At the hearing of the appeal, the appellants were represented by Mr. Roman Masumbuko, learned counsel whereas the respondent was represented by Ms. Faiza Salah, learned counsel. It is important to note that the learned counsel for the parties had previously submitted their respective written submissions in support of or in opposition to the 4 appeal in accordance with rule 106 (1) and (7) of the of the Tanzania Court of Appeal Rules, 2009 (the Rules). These submissions were adopted into their respective oral submissions. We wish to state at this juncture that we will only summarize the arguments of the parties in respect of the eleventh ground of appeal, which we think is sufficient to dispose of this appeal. For the sake of clarity, the said ground is to the effect that: "11. The learned trial Judge erred in law and fact by granting the alternative reliefs including appointing Ms. Linda Bosco (Advocate) as the receiver manager for the matter while she was representing as an advocate for the plaintiff/' Submitting on that ground, Mr. Masumbuko faulted the learned trial Judge for failure to observe that, Ms. Linda Bosco, the advocate who prepared the original plaint, the amended plaint and prosecuted the respondent's case had an apparent conflict of interest on the matter. He argued that, it was improper for the said advocate to prepare the said pleadings and represent the respondent while she was a beneficiary to some of the reliefs sought therein. Amplifying on the said point, Mr. Masumbuko referred us to pages 1 to 6 of the record of appeal where items (v) and (vii) of the reliefs sought were on the appointment of the 5 said advocate as a receiver manager with powers to sell the landed mortgaged properties that belonged to the second and third appellants. He also referred us to pages 582 to 583 of the same record where the learned trial Judge granted the said reliefs and proceeded to appoint Ms. Linda Bosco as a receiver manager for the respondent. It was the argument of Mr. Masumbuko that, since Ms. Linda Bosco had conflict of interest in the matter, it was improper for her to prepare the said pleadings and prosecute the case as reflected at pages 511 to 557 of the record of appeal. That, such representation of the respondent was contrary to Regulation 35 (1) of the Advocates (Professional Conduct and Etiquette) Regulations, 2018 (the Advocates Etiquettes). In addition, Mr. Masumbuko referred us to section 128 (5) of the Land Act, Cap. 113 of the Revised Laws (the Land Act) which provides for the relationship between the mortgagor and a receiver manager together with the legal duty of a receiver manager. Based on his submission, he beseeched us to nullify the entire proceedings before the trial court, quash the judgment and set aside the decree as it emanated from nullity proceedings. In her response to this ground, Ms. Salah started by blaming her learned friend for having raised the issue conflict of interest by an advocate at this stage of an appeal. She contended that, throughout the 6 trial, the appellants did not raise any concern related to the conduct of the said advocate and/or the reliefs sought in the amended plaint. She argued further that, it is a settled principle that matters which were not raised and determined by the lower courts cannot be raised in this Court. To support her proposition, she referred us to our previous decision in Simon Godson Macha v. Mary Kimambo, Civil Appeal No. 393 of 2019 [2020] TZCA 36: [28 February 2020: TanzLII]. She contended that, in terms of sections 126 and 128 of the Land Act, the appointment of a receiver manager, is solely for the purposes of bringing liability to the mortgagor and not to the mortgagee. It was her argument that, Ms. Linda Bosco was appointed by the learned trial Judge as a receiver manager to act as an agent for the mortgagor and not for the mortgagee. She also added that, there is no law which prohibits an advocate who acted for the mortgagee from being appointed a receiver manager. In that regard, she urged us to find that the eleventh ground of appeal is devoid of merit. In a brief rejoinder, Mr. Masumbuko reiterated what he submitted earlier and insisted for the appeal to be allowed with costs. On our part, having carefully considered the rival arguments advanced by the learned counsel for the parties and examined the record of appeal before us, the main issue for our consideration is 7 whether Ms. Linda Bosco, learned counsel who represented the respondent before the trial court had a conflict of interest in the said proceedings or otherwise and, if the answer is in the affirmative then, whether it was proper for the learned trial Judge to proceed with the trial and finally awarded the reliefs sought in respect of the said counsel. At the outset, we wish to state that we agree with Ms. Salah that, this Court is mandated to hear appeals from the High Court or court of the Resident Magistrate with extended jurisdiction on matters canvassed before them and determined by such courts or tribunals. There is plethora of authorities on this matter. See for instance the cases of Abdul Athuman v. Republic [2004] TLR 151 and Joseph Ndyamukama v. N.I.C Bank Tanzania Ltd & 2 Others, Civil Appeal No. 239 of 2017 [2020] TZCA 1889: [11 December 2020: TanzLII]. However, and as a general principle, this Court is not precluded from entertaining a ground which raises a point of law. A point of law can be raised at any stage of proceedings. The said position has been restated in a number of decisions of the Court - see for instance the cases of Rift Valley Co-op Union & Another v. Registered Trustees, Mbulu Diocese, Civil Appeal No. 12 of 2007 (unreported) and Salum Ally Salum v. Republic, Criminal Appeal No. 9 of 2021 [2023] TZCA 17668: [29 September 2023: TanzLII]. 8 To cement our stance, specifically on this matter, we wish to borrow a leaf from a leading decision of the Supreme Court of Canada R. v. Neil (2002) 3 S.C.R.631, 2002 SCC70 on conflict of interest, where among other things, it insisted that advocates have a fiduciary duty of loyalty to their clients. The said duty is an essential element of the profession and the administration of justice. Specifically, on whether the issue of conflict of interest of an advocate can be raised at that level, the Supreme Court of Canada observed that: "The conflict o f interest should, o f course be raised at the earliest practicable stage. I f the trial is concluded, may still be raised at the appellate level as a ground to set aside the trial judgment, but the test is more onerous because it is no longer a matter o f taking protective steps but o f asking for the reversal o f a court's judgm ent" (Emphasis added). We fully subscribe to the above cited decision. Therefore, taking into account that the eleventh ground of in this appeal raised a crucial point of law on the professional conduct and etiquette of advocates, this final Court of the land should not gloss over such a matter of professional importance. Going back to the issues. Our starting point is Regulation 35 (1) of the Advocates Etiquettes, which provides that an advocate shall not 9 act for a client when the interests of the client and the personal interests of the advocate or, the interests of any other person in his firm are in conflict. The word, 'Conflict o f interest’ is defined under Regulation 3 of the Advocates Etiquettes to include a situation that has the potential risks to undermine the impartiality of an advocate because of the possibility of a clash between the advocate's self-interest and the public interest. Furthermore, Regulation 45 (1) of the Advocates Etiquettes defines a conflict of interest in the following words: "A conflict o f interest is one that would likely to affect adversely the advocate’s judgment or advice on behalf of, or loyalty to a client or prospective client." This Court, in several occasions, has pronounced itself on the applicability of the above provisions. See for instance, the cases of Pravincharidra Girdharlal Chavda v. Vidyadhar G. Chavda [1998] TLR 349, Clemence O. Mbowe v. Donald A. Kimambo & Another, Civil Appeal No. 240 of 2022 [2024] TZCA 234: [22 March 2024: TanzLII] and UAP Insurance Tanzania Limited v. Akiba Commercial Bank PLC, Civil Appeal No. 135 of 2022 [2023] TZCA 17784: [31 October 2023: TanzLII]. In the latter case, we stated that: 10 "Conflict o f interest would arise when the advocate is required to uphold justice but his personal interest or interest o f his client reveals a contrary intention." Again, in Clemence O. Mbowe (supra), we observed that: "...an advocate breaches his duty to provide his client with complete and undivided loyalty, dedication; full disclosure and good faith and duty to uphold justice and importantly' a duty to preserve confidence in the administration o f justice. We think justice will not be seen to have been done and members o f the public will lose confidence with the administration o fjustice..." Now, in the instant appeal, having meticulously perused the record of appeal, there is no doubt that the amended plaint which appears at pages 1 to 10 of the record of appeal was drawn and filed by Ms. Linda Bosco, learned counsel for the respondent from a law firm styled as Rod & Shepherd Advocates. It is also clear that the said advocate was a beneficiary to some of the reliefs sought in the said plaint, as theywere directly related to the said advocate. For the sakeof clarity, reliefs No. (v), (vi) and (vii) reads as follows: 11 (v) Appointment o f Ms. Linda Bosco Advocate as receiver manager with power to seii the landed mortgaged properties...; (vi) An order against the 2nd and J d appellants to provide vacant possession over the said properties...; and (vii) Appointment o f Ms. Linda Bosco Advocate as a receiver and manager o f all the fixed assets o f the 1st appellant charged under the debenture..." It is also on record that, throughout the trial before the High Court, the respondent was fully represented by Ms. Linda who drew up pleadings, prepared witness statements, attended final pre-trial conference, examined, cross examined and re-examined witnesses and made both oral and written submissions for and on behalf of the respondent. As indicated above, in the end, the learned trial Judge decided the matter in favour of the respondent and appointed Ms. Linda as a receiver manager under items (v) and (vii) above. Given the circumstances, and being guided by the above authorities, we concur with Mr. Masumbuko's submission that there was a conflict of interest, as it was impossible for the said advocate to act on the client's interests and at the same time for her personal benefits and also saving as an officer of the court without violating the Advocates Etiquettes. Even if a litigant is assured of the undivided loyalty of the 12 advocate, neither the public nor the litigant will have confidence that the legal system, which may appear to them to be hostile and hideously complicated environment, is a reliable and trustworthy means of resolving their disputes. We are increasingly of the view that, if such a conduct is left to stand, will diminish public confidence in the administration of justice which is not expected from a country which is governed by the rule of law and constitutionalism. It is therefore our considered view, and as correctly argued by Mr. Masumbuko, the said contravention had rendered the entire trial court's proceedings a nullity. It is unfortunate that the said irregularity missed the eyes of the learned trial Judge as it could have been addressed and determined timely by that court. In the circumstances, we find the eleventh ground of appeal to have merit and we allow it. Since our findings on this ground suffice to dispose of the appeal, we see no compelling reasons to consider the remaining grounds of appeal raised by the appellants. In the premises, we find that the entire proceedings before the trial court were vitiated. As a result, we have no option other than to nullify the aforementioned proceedings, quash the trial court's decision and set aside the subsequent orders thereto. The respondent is at 13 liberty to process her suit afresh against the appellants, if she so wishes, in accordance with the law. In the event and for the foregoing reasons, we find merit in the appeal and allow it with costs. DATED at DODOMA this 25th day of February, 2025. R. J. KEREFU JUSTICE OF APPEAL P. S. FIKIRINI JUSTICE OF APPEAL B. S. MASOUD JUSTICE OF APPEAL The Judgment delivered this 25th day of February, 2025, in the presence of Mr. Roman Masumbuko, learned counsel for the Appellants and Ms. Faiza Salah, learned counsel for the Respondent, linked via Video Conference from Dar es salaam is hereby certified as a true copy of the original. C. M. MAGESA DEPUTY REGISTRAR COURT OF APPEAL 14