SITA GAPI

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA MUSOMA SUB-REGISTRY

AT MUSOMA CIVIL APPEAL NO. 9734 OF 2024 CASE REFERENCE NO. 202405021000009734 SITA GAPI SAGUDA............................................................................. APPELLANT

VERSUS HAMIDU MADAHA MWAGO....................................................... 1st RESPONDENT 2 LUCAS DANIEL MARCO.............................................................. nd RESPONDENT

JUDGMENT OF THE COURT 18/09/2024 & 16/10/2024 Kafanabo, J.: This is an appeal preferred from the decision of the District Court of Bunda (Hon. M.P.Kamuntu, SRM) in Civil Appeal No. 37 of 2023 dated 6th November 2023 which originates from Civil Case No. 61 of 2023 of the Bunda Urban Primary Court (hereinafter the 'trial court'). A brief background of the matter is that on 1st December 2022, the Appellant and the 1st Respondent entered into a joint venture contract I i regarding mineral/mining business regarding a bulky of sediments containing gold residues/crystals already on place (hereinafter referred to as the ! 'sediments'). In the said contract 1st Respondent was categorized as the owner of the sediments and the Appellant was named a partner in the said business. It was agreed that the Appellant had paid TZS 10,000,000/= to i the 1st Respondent as the entrance fee of the partner in the said business regarding the sediments located at the Nyarufu Village, in the Murangi Ward, in Rural Musoma, Mara Region. It was also agreed that the Appellant had paid the 1st Respondent TZS 5,000,000/= as capital contribution in enhancing the said mining business, and after the production of gold and sale of the same, the said amount of TZS 5,000,000/= shall be repaid to the Appellant: It was also a term of the contract that after the sale of the gold to be produced from the said sediments

TZS 30,750,000/= shall be paid to the 1st Respondent as costs incurred in establishing and developing the mineral business as regards the sediments. Moreover, it was agreed that after deduction of all expenses incurred in the gold production from the sediments, including the TZS 5,000,000/= paid by the 1st Respondent as capital, the remaining amount shall be divided between the parties to the contract. That the Appellant shall be given thirty percent (30%) and the 1st Respondent to be given seventy percent (70%). It followed that a dispute arose between the parties, and the Appellant herein alleged that the 1st Respondent breached the contract. He thus instituted Civil Case No. 61 of 2023 at the Bunda Urban Primary Court claiming TZS 19,154,300/=. The basis of the claim was that gold was sold for TZS 82,931,000/= which was received by the 2nd Respondent on behalf of the 1st Respondent. It was alleged that on 14/04/2023 the 1st Respondent breached the contract for failure of the 1st Respondent to pay the Appellant 30% of the profit obtained. The total profit obtained was TZS 47,181,000/= 2 and thus the 30% of the same plus capital of TZS 5,000,000/= makes a total claim to be TZS 19,154,300/=. The said amount of money was received by the 2nd Respondent on behalf of the 1st Respondent who refused to pay the same to the Appellant on the instructions of the 1st Respondent. The trial

court heard the parties and decided the suit in favour of the Appellant where it ordered, among others, that the 2nd Respondent pay the Appellant TZS 17,270,364.88. The Respondents were dissatisfied with the said decision and thus appealed to the District Court of Bunda vide Civil Appeal No. 37 of 2023. The District Court in its judgment delivered on 06/11/2023 allowed the appeal, quashed the trial court's proceedings and set aside all the trial court's orders, and ordered that TZS 1,048,108.38 be paid by the 2nd Respondent to the 1st Respondent and the Appellant for distribution. The Appellant being dissatisfied by the decision of the district court approached this court by way of appeal on two grounds namely: 1. The District Court erred in law and fact by finding that the Appellant did not prove his claim to the required standard.

2. The District Court erred in law and fact by failing to properly analyse the evidence of the parties adduced at the trial Court thus leading to die wrong finding that the Appellant is only entided to a sum of TZS. 314,432.514. The Appellant prayed that this appeal be allowed with costs, the judgment and orders of the District Court be quashed and set aside, and that the judgment and orders of the trial court be upheld. 3 At the hearing of the appeal Ms. Suzana Jacob Gibai, learned Advocate entered an appearance for the Appellant, and Mr. Edson Philipo, learned Advocate entered an appearance for the Respondents. In support of the appeal, Ms. Suzana Jacob Gibai, submitting on the first ground of appeal, argued that the Appellant proved his case to the required standard according to the evidence adduced in the trial court. She also submitted that it is important to note that the 1st Respondent, in the primary court, denied that he was indebted to the appellant to the tune of TZS 19,154,300/=, but acknowledged that he was indebted to the Appellant to the tune of TZ 5,000,000/= as indicated on page 2 of the judgment of the primary court. Therefore, the decision of the District Court that the appellant was entitled to be paid TZS 314,432.514 was incompatible with the evidence adduced in the trial court. It was also argued that in the trial court, the Appellant proved the basis of

his claim and tendered agreement which was admitted as exhibit Pl. The agreement showed how each party contributed the capital and how the profit was to be distributed after the sale of gold as indicated in clauses 2, 3, and 4 of the contract. However, the District Court interpreted the contract in favour of the Respondents by considering other alleged operational costs which were not covered in the contract as indicated on page 06 of the judgment of the District Court. This is taking into account the fact that all costs were covered in the contract and the capital contributed by the Appellant and the 1st Respondent. 4 Moreover, it was submitted that on page 10 of the primary court decision it is indicated that the 2nd Respondent handed over TZS 43,577,000/= to the 1st Respondent. It is clear that the District Court failed to consider the evidence adduced. Also, the contract, exhibit Pl was not considered in determining what the 1st Respondent and the Appellant agreed. It is a matter of law that parties are bound by the terms of the contract. The case of Simon Kichele Chacha v. Aveline M. Kilawe, Civil Appeal No. 160 of 2018 was cited to bolster the learned counsel's I submissions. As regards the 2nd ground of appeal, the learned counsel for the Appellant submitted that it was wrong for the District Court to rule that the Appellant was entitled to be paid TZS 314,432.514. The

District Court failed to analyse the evidence adduced in the primary court, which proved that the Appellant was entitled to be paid TZS 17,270,364.88. This was according to the agreement admitted as exhibit Pl which showed the amount each party was entitled to. Also exhibit P2, on the sale of gold, indicated that gold was sold for TZ 81,651,216.26. Exhibit P2 also indicated the taxes deducted by the government. Also when the 2nd Respondent was adducing his evidence as SU2, testified that after selling the gold, he deducted his expenses of TZS 35,923,000/= and remained with 43,577,000/ which he gave to the 1st Respondent. Opposing the appeal, Mr. Philipo responded to both grounds of appeal I as one, because they are interrelated. He submitted that it is not true that । the 1st Respondent admitted the five million as a debt because if that were 5 the case, the primary court was to deliver judgment on admission. However, according to paragraph 4 of the contract, the five million was the amount issued by the Appellant as operational costs. Moreover, the contract referred to was of two persons only, that is the Appellant and the first Respondent. The decision of the District Court was proper because it explained on page 06 of the decision on entitlements of the parties, that the Appellant should get 30% and the 1st Respondent was supposed to get 70% as per clause four of the

contract. The learned counsel for the Respondents also submitted that, the analysis of the amounts of money claimed by the Appellant was not in the contract. Also, the case cited by the Appellant is distinguishable from the present case because the contract in question was a loan contract, but the contract in the present case was about the costs of gold elution. In the Primary Court proceedings, the contract was admitted unlawfully because it had no stamp duty, the Respondents objected to its admissibility. However, it was admitted as the Primary Court ruled that the said law on admissibility does not apply in the Primary Courts. Moreover, it was submitted that the decision of the District Court was proper, and the learned counsel prayed that the Appeal be dismissed and the decision of the District Court be upheld with costs. After the Appellant's counsels have implemented their duties by submitting on the grounds of appeal, it is opportune now for this court to determine the appeal in the light of the evidence on record, the law, and submissions of the parties. 6 As alluded to herein above, and as argued by the parties it is not in dispute that the parties herein entered into a contract in respect of which they agreed to share the profit of sales of gold after deduction of capital contributed and costs incurred. The trial court's record speaks for itself that as per exhibit Pl

(the joint venture agreement), it was proved that the parties agreed that after the sale of gold processed from the sediments, as per clause 3 of the agreement, TZS 30,750,000/= shall be paid to the 1st Respondent as costs incurred in establishing and developing the mining project as regards the sediments. Moreover, it was agreed that after the deduction of all expenses incurred in the gold production including the TZS 5,000,000/= paid by the Appellant, as per clause 2 of the contract, arid TZS 5,000,000/= paid by 1st Respondent as capital, the remaining amount shall be divided between the parties to the contract. That the Appellant shall be given thirty percent (30%) and the Respondent to be given seventy percent (70%). As per the contract, the liquidated amount specified as costs makes a total of TZS 40,750,000/=. It is also not in dispute that other costs supposedly incurred by the Respondents were neither stated nor specified in the contract. This takes this court to the other costs of TZS 35,923,000/= allegedly incurred by the 2nd Respondent (as per exhibit DI) on the alleged instructions of the 1st Respondent through SU3 (DW3), one Jumanne Madaha. It is clear that said costs were not part of the contract between the Appellant and the 1st I Respondent. Further, as properly ruled by the trial court, the said costs were not mutually agreed by the parties to the contract.

Neither the 1st Respondent nor the 2nd Respondent adduced evidence that the said 7 processing costs were agreed by the parties to a contract. It follows that since the alleged costs of TZS 35,923,000/= were incurred without the Appellant's consent, it is safe to conclude that they were incurred at the Respondents' own risk. It follows that the alleged costs of "TZS 35,923,000/= should not have been considered by the 1st appellate court, the District Court of Bunda, as costs validly incurred as per the terms of the contract. Reverting to analyzing the amount at which gold was sold and the profit made, it is noted that all the parties in this case, as noted by the trial court, differed in their testimonies regarding the actual amount at which the gold was sold. The Appellant testified the gold was sold at TZS 89,000,000/=, the 1st Respondent said it was sold at TZS 82,000,000/= and the 2nd Respondent testified that the gold was sold at 82,900,000/=. Given the varying figures, this court is compelled to examine the evidence on the record as contained in exhibit P2. This is resorted to taking into account the fact that this is a second appeal and it is trite law that the 2nd appellate court should rarely interfere with the concurrent finding of facts of the courts below. In the case of Mediterranean Shipping Company Ltd vs Emmanuel Agreyson Daudi t/a Ishey's General Enterprises &

Another (Civil Appeal No. 342 of 2021) [2024] TZCA 863 (6 September 2024), the Court of Appeal held that: "Before, we do that, we need to point out, as enjoined by counsel for the 1st respondent, that this being the second appeal, the Court rarely interferes with the concurrent findings of facts by two lower courts. It 8 can only disturb them where It is clearly shown that there has been a misapprehension of evidence, a miscarriage ofjustice or violation of some principle oflaw or procedure- see die case ofAmratlal Damodar Maltaser & Another v. A.H. Jariwalla t/a Zanzibar Hotel [1980] T.LR. 31." In the present case, however, the finding on facts of the two courts below is different, and thus there is justification for reassessing the evidence, especially exhibit P2, and where necessary to interfere with the finding of facts of the said courts in the interest of justice. It follows that the said exhibit P2, as admitted by the trial court contains the following documents: 1. The first is a Valuation of Minerals and Sale Report dated 14/04/2023 which indicates that the mineral type was gold (626.65 grams) and the 2nd Respondent was the seller. It is not in dispute that he sold the minerals on behalf of the Appellant and the 1st Respondent. The report also indicates that the calculated value of the minerals was TZS 83, 841,540/=, Royalty TZS 5,030,492/=, Inspection fee TZS 838,415/= service levy TZS 251,524.62.

2. The second is a Valuation of Minerals and Sale Report dated 14/04/2023 which indicates that the mineral type was gold (32.91 grams) and the 2nd Respondent was the seller. It is not in dispute that he sold the minerals on behalf of the Appellant and the 1st Respondent. The report also indicates that the calculated value of the 9 minerals was TZS 4,239,706/=, Royalty TZS 254, 382/=, Inspection fee TZS 42,397/=, and service levy TZS 12,719.12.

3. The other documents include a gold processing form for elution plants dated 14/04/2023, and a mineral transportation permit dated 14/04/2023 both bearing the name of the 2nd Respondent. In light of the above documents, the gold was sold at a total value of TZS 88,081,246/=. Then after deducting relevant government charges (royalty, inspection fee, and service levy) as indicated in both valuation and sale reports, the remaining amount was 81,651,319.26. Then from this amount, there shall be deducted contractual costs incurred which, as stated herein above, was TZS 40,750,000/=. After the deduction of the said contractual costs, TZS 40,901,319.26 remains as an amount free of contractual costs incurred. Therefore, it is from this amount (TZS 40,901,319.26) that the terms of the contract regarding the division of profit are applicable. That is 70% to the 1st Respondent and 30% to the Appellant. TZS 12, 270,395.778 is the 30% of TZS 40,901,319.26, then if TZS 5,000,000/= stated in clause 2 of the agreement as payable to the Appellant is added to the said 30% the total amount payable to the Appellant is TZS 17,270,395.778. This means that, in principle, this court agrees with the decision of the primary court based on the calculations regarding the amount that the Appellant is entitled to. It follows that this court, with respect, parts ways with the decision of the District Court

of Bunda which ruled that the total costs incurred by the 2nd Respondent was TZS 35,923,000/= and was to be deducted first by the io 1st Respondent from the gold sales and be paid to him. Exhibit DI relied upon by the District Court, is simply an itemization of the alleged costs not approved by both parties to the contract in writing, and had no evidential value. It follows that the same could not be relied upon by the court as an addendum to the contract, or a valid document for alteration of terms of the contract duly executed without the written consent of the parties to the contract. The decision of the District Court subject matter of this appeal contravened section 37 of the Law of Contract Act; Cap. 345 R.E. 2019 which provides that: 37.-(l) The parties to a contract must perform their respective promises, unless such performance is dispensed with or excused under the provisions of this Act or ofany other law. Also, section 62 of the Law of Contract Act(supra) provided that: 62. Where the parties to a contract agree to substitute a new contract for it, or to rescind or alter it the original contract need not be ' performed. In light of the above provisions of the law, it is clear that the 1st Respondent was bound to perform the terms of the contract as agreed between him and the Appellant. Any other arrangement between him and the 2nd Respondent affecting the rights of

the Appellant in the contract should have involved the Appellant, and where convinced, he would have given his consent in the event of any variation of the terms of the contract, r taking into account change of circumstances in performing their original i contract. In the absence of written consent to changing the original terms of the contract, the alleged costs incurred by the 2nd Responded in the ii purported carrying out of the terms of the contract were purely the solitary initiative of the 1st Respondent, and therefore he should solely bear the burden of the same. Cementing the above position is the cardinal principle of the law of contract that the parties have to respect the sanctity of the contract they had freely entered into. In the case of Simon Kichele Chacha vs Aveline M. Kilawe (Civil Appeal No. 160 of 2018) [2021] TZCA 43 (26 February 2021) the Court of Appeal held that: "It is settled law that parties are bound by the agreements they freely entered into and this is the cardinal principle of the law of contract. That is, there should be a sanctity of the contract as lucidly stated In Abua/y AUbhai Azizi v. Bhatia Brothers Ltd [2000] T.L.R 288 at page 289 thus: - The principle of sanctity of contract is consistently reluctant to admit excuses for non-performance where there is no incapacity, no fraud (actual or constructive) or misrepresentation, and no principle

ofpublic policy prohibiting enforcement" With the same spirit of the principle of sanctity of contract and being mindful with the clauses of the Exhibit PI, we are reluctant to accept the appellants excuse for non-performance of the agreement which he freely entered with sound mind. On our part, we are satisfied that the contract entered between the appellant and the respondent had all attributes ofa valid contract" 12 Also, see the cases of 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). Moreover, in the case of Harold Sekiete Levira & Another vs African Banking Corporation Tanzania Limited (Bank Abe) (Civil Appeal 46 of 2022) [2022] TZCA 754 (30 November 2022) the Court observed that strictly speaking, under our laws, once parties have freely agreed on their contractual clauses, it would not be open for the courts to change those clauses which parties have agreed between themselves. Further observation of the Court was that it was up to the parties concerned to renegotiate and to freely rectify clauses that parties find to be onerous. It is not the role of the courts to re-draft clauses in agreements but to enforce those clauses where parties are in dispute. The above position of the Court of Appeal fit squarely on the circumstances of the present case in

respect of which the 1st Respondent did not engage the Appellant in renegotiation of costs allegedly unavoidable in the processing of the sediments by the elution plant allegedly owned by the 2nd Respondent. In light of the foregoing, this appeal is allowed, the judgment of the District Court of Bunda dated 6th November 2023 is hereby quashed and the decree thereof is hereby set aside. The judgment and proceedings of the primary court quashed and set aside by the District Court are hereby restored and reinstated. Under circumstances of the matter each party shall bear their costs. It is so ordered. 13 Dated at Musoma this 15th day of October 2024. K. I. Kafanabo Judge 15/10/2024 The Judgment was delivered today in the presence of Mr. Emmanuel Mng'arwe represent! e Appellant, and in the attendance of Mr. Edison kt oa ? Philipo (linked e) representing the Respondents. I. Kafanabo Judge 5/10/2024 14