SYL V MKOMBOZI

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA IN THE SUB-REGISTRY OF MWANZA AT MWANZA LAND CASE NO. 14512 SYLICHERIA BAKALEMWA t/a Huruma Watoto Health Services.................................................................... PLAINTIFF VERSUS MKOMBOZICOMMERCIAL BANK PLC...................................... 1STDEFENDANT MWACHAMWENDA COMPANY (T) LIMITED............................ 2nd DEFENDANT GADAU AUCTIONING MART & COMPANY LIMITED.................3rd DEFENDANT RULING 30/10/2024 & 15/11/2024 ROBERT, J:- This ruling addresses the preliminary objections raised by the first and third defendants in response to the plaintiff's suit. The defendants contend that the court lacks jurisdiction to hear the case on three grounds: (1) that the court is functus officio and the plaintiff's claim is res judicata; (2) that the plaintiff's plaint does not disclose a cause of action; and (3) that the case constitutes an abuse of the court process. Briefly, the Plaintiff, Sylicheria Bakalemwa, trading as Hurumia Watoto Health Services, instituted this suit against Mkombozi Commercial Bank PLC (1st Defendant), Mwachamwenda Company (T) Limited (2nd Defendant), and 1 Gadau Auction Mart & Company Limited (3rd Defendant), arising from the alleged unlawful sale of her property located on Plot No. 413, Block A, Pasiansi area, Mwanza City. In 2016, the 1st Defendant initiated Commercial Case No. 01 of 2016 against the Plaintiff, alleging a breach of a loan agreement. This case culminated in a settlement deed recorded as a Court decree on May 2, 2017. However, in 2021, the 1st Defendant sought an execution order against the Plaintiff, leading to an attachment order on her property. On 4th November 2022, the court ordered the proclamation of sale of the Plaintiff's property. Kassanga H. Kassanga, a court broker, was appointed to conduct the auction. The Plaintiff contends that she was never notified of the intended auction and only discovered the sale on 17th January 2024 when a notice demanding vacant possession was affixed to her house. The Plaintiff alleges that the 3rd Defendant issued this notice without any court appointment to conduct the auction. The Plaintiff obtained a copy of the certificate of sale indicating that the property was sold to the 3rd Defendant for TZS 250,000,000/-, a sum she contends is significantly below its market value of TZS 978,312,144.20, based on a recent valuation. She alleges that the sale was marred by irregularities and fraud, asserting that the auction was not conducted 2 publicly, that the auctioneer was not court-appointed, and that there was a pending application before the Court at the time of the sale. Additionally, she claims the auction occurred after she had fully satisfied the court decree. Therefore, the Plaintiff seeks the following reliefs: A declaration that the August 2023 valuation report is unlawful; a declaration that the sale was unlawful and that she retains ownership of the property; an order for vacant possession, or alternatively, payment of the value difference amounting to TZS 728,312,144.20; general damages and costs of the suit. Prior to the hearing of the matter on its merits, the 1st and 3rd Defendants' raised a preliminary objection based on the grounds reproduced below: 1. That in respect of the claim that the Plaintiffhonoured the terms in the deed of settlement, the honourable court is functus officio and the plaintiff's case is resjudicata; 2. That the plaintiff plaint does not disclose a cause of action against the defendants; 3. The Plaintiff's case is an abuse of Court process. Submitting in respect of the first point of preliminary objection, Dr. George Mwaisondola, counsel for the 1st and 3rd Defendants argued, with respect to functus officio, that the High Court has already dealt with the issue of whether 3 the Plaintiff had honoured the terms of the deed of settlement. He pointed to previous decisions in Commercial Case No. 6/2019 and Execution Proceedings in Commercial Case No. 1/2016 where the Plaintiff's default after the settlement was acknowledged. He asserted that the Court is functus officio, meaning it cannot reopen matters that have already been decided. With regards to res judicata, he submitted that, the Plaintiff's claims are barred by res judicata, as they have been decided in prior cases. He made reference to Section 9 of the Civil Procedure Code (Cap 33 R.E 2019), which prevents the court from hearing cases that have already been adjudicated. He maintained that, the Plaintiff's claims regarding the sale and execution were addressed in Commercial Case No. 6/2019, and the Plaintiff had already withdrawn an appeal against the ruling in that case. Additionally, he referred to the case of Ibrahim Twahili Kusundwa & Another vs CRDB Bank pic & 3 Others, Civil Appeal No 194 of 2021 (TanzLii) at pp 21, 23 & 24 and the case of Petrolux Service Stations vs N.M.B Bank pic & Another, High Court of Tanzania at Musoma, Misc. Land Application No 86 of 2020 (unreported) to emphasize that once a decision has been made, it cannot be revisited.. In response, the Plaintiff's counsel, Mr. Elias Hezron, disagreed with Dr. Mwaisondola's assertion of res judicata. He argued that the issue of whether 4 the Plaintiff had honoured the terms of the deed of settlement was never raised or adjudicated in the prior cases cited by the Defendants. Counsel claims that the Plaintiff has provided evidence (a bank statement) to show that she honoured the terms of the deed of settlement, specifically noting that the amount was settled and the loan cleared on 30/05/2017. The Plaintiff asserts that the Defendants wrongfully proceeded with the sale of the property without recourse to the court's assistance during the execution process. He distinguished the current case from the previous ones, emphasizing that the specific issue of settlement and payment under the deed of settlement was not adjudicated in the earlier proceedings. Therefore, she argues that res judicata does not apply in this instance. The doctrine of res judicata, as codified in Section 9 of the Civil Procedure Code [Cap 33 R.E. 2019], prevents a court from hearing a matter previously settled between the same parties on the same issues by a competent court. It is a principle intended to ensure the finality of litigation. In addressing the issue of res judicata, the Court must first establish whether the matter before it involves a dispute that has been previously litigated and conclusively determined by a competent court. 5 The crux of the present dispute revolves around the plaintiffs claim that the execution of the decree was flawed. The Deed of Settlement in Commercial Case No. 1 of 2016 provided the defendant with certain rights to recover the outstanding debt through the sale of the mortgaged property, without recourse to the Court in the event of default. This clause, as cited in the written statement of defense, allows the defendant to take action without further judicial intervention, as long as there is default in the repayment terms. The grievance raised by the plaintiff pertains to how the execution process was carried out, specifically alleging that the process was mishandled. However, the Deed of Settlement had already addressed the issue of default, and the terms of the agreement were meant to be executed without needing to return to court. Therefore, the execution of the decree, which flows from that default, cannot be contested without first addressing the issue of whether the execution process violated the terms of the Deed of Settlement. The allegations raised by the plaintiff in the present case appear to be focused not on the substance of the default itself but on how the Deed of Settlement was executed. In light of this, the Court must consider whether the execution of the decree is part of the same issue already settled, or if the plaintiff is attempting 6 to re-litigate the underlying issue of default. If the plaintiff is attempting to re­ litigate the default, then the principle of res judicata would apply, as the matter was conclusively resolved in Commercial Case No. 1 of 2016. However, if the claim is strictly limited to challenging the process of execution, then it may not fall within the ambit of res judicata, since the execution process is a separate issue not directly and substantially involved in the prior suit. Based on the pleadings and submissions of the parties, it appears that the plaintiff's challenge is primarily rooted in the execution process of the Deed of Settlement and not in the default itself. Specifically, the plaintiff argues that the defendant mishandled the execution of the decree arising from the settlement, particularly in relation to the sale of the mortgaged property. The default in servicing the loan was already adjudicated in Commercial Case No. 1 of 2016, and the parties entered into a Deed of Settlement to resolve the issue. This was a binding agreement that included terms for the execution of the settlement without further court intervention in case of default. Therefore, the default itself is no longer an issue for litigation, as it was conclusively decided in the earlier case. The plaintiff's challenge now pertains to how the defendant has executed the decree arising from the Deed of Settlement. The plaintiff claims that the 7 sale of the mortgaged property was improperly carried out, and thus seeks redress for the alleged mishandling of the execution process. This claim is not a re-litigation of the default itself but a challenge to the procedural handling of the settlement's enforcement. The defendant argues that the issue of default has already been decided, and since the Deed of Settlement provided for a method of execution, the plaintiff cannot now challenge the execution process. The defendant suggests that res judicata should apply because the same parties and the same issue (default in loan repayment) have already been adjudicated. Given the above, it is clear that the plaintiff is not contesting the substance of the default that was conclusively resolved in Commercial Case No. 1 of 2016. Rather, the plaintiff is challenging the execution process that followed the default and the enforcement of the settlement's terms. Since the plaintiff's claim in this case does not directly and substantially involve the default itself, but instead revolves around the manner in which the settlement was executed, the principle of res judicata does not apply in this instance. The issue of how the decree was executed is an ancillary matter that does not overlap with the core issue of default that was already settled. 8 Therefore, the plaintiff's challenge is based on procedural aspects of the execution, which is distinct from the substantive issue of default. The plaintiff's challenge is not barred by res judicata, as it concerns the execution of the settlement rather than the default itself. The matter of execution is a separate issue and can be properly addressed by the Court without violating the principle of res judicata. The case may therefore proceed on its merits, with the Court considering whether the execution process was carried out in accordance with the terms of the settlement. As for the issue of functus officio, the doctrine of functus officio posits that once a court has fulfilled its mandate by rendering a final decision on a matter, it lacks the authority to revisit or alter that decision, save for specific exceptions like correcting clerical errors or where statutes provide otherwise. This principle aims to uphold the finality of judgments and prevent continuous litigation on the same issues. In the present case, the defendants raised a preliminary objection on the basis that the court is functus officio, arguing that the dispute between the parties was conclusively resolved in Commercial Case No. 1 of 2016 through a Deed of Settlement. Their position is that the court, having endorsed the 9 settlement agreement as a final decree, exhausted its jurisdiction over the matter and, therefore, cannot entertain the plaintiff's current claims. The Deed of Settlement in Commercial Case No. 1 of 2016 was adopted as a consent judgment, constituting a final decree of the court. By endorsing the settlement, the court resolved the substantive issues of default and the obligations of the parties regarding the repayment of the loan. Typically, such a decree would render the court functus officio, meaning it has no further authority to revisit the matter because the consent judgment represents the parties' agreed resolution. However, the plaintiff's current challenge is not against the content of the settlement or the consent judgment itself but focuses on how the execution of that judgment was conducted. The plaintiff alleges irregularities and improprieties in the execution process, particularly regarding the sale of the mortgaged property. It is well established that while a court may be functus officio regarding the substantive issues already adjudicated, it retains jurisdiction to supervise and address issues arising from the execution process. The rationale is that execution is a distinct stage that involves the enforcement of a court's decision, 10 and the court has an inherent duty to ensure that its orders are properly executed. The Court of Appeal in Karata Ernest & Others v. Attorney General, [1997] TLR 63, highlighted that a court becomes functus officio after rendering a final judgment on the substantive issues, but it is not precluded from addressing issues related to the execution of its orders. Similarly, in Shahan Said Nyange v. Mary Paulo, Civil Application No. 28 of 2022, the Court recognized that a party challenging the manner of execution does not invoke the principle of functus officio because such matters relate to the enforcement rather than the re-litigation of the original decision. The plaintiff's case centers on the alleged irregularities in the execution of the decree, arguing that the defendant, in enforcing the Deed of Settlement, did not adhere to the prescribed legal procedures, resulting in a flawed sale of the mortgaged property. These claims are procedural in nature and do not challenge the terms or validity of the settlement agreement itself. Instead, they question whether the execution was carried out fairly and lawfully. The court finds that it is not functus officio in this instance because the plaintiff's challenge pertains to the execution of the decree, not the merits of li the original settlement. The supervision of execution is an inherent judicial function, ensuring that the enforcement of court orders complies with legal standards. Thus, the preliminary objection on the ground of functus officio is dismissed, and the case shall proceed to address the issues related to the execution process. Coming to the second point of preliminary objection, counsel for the 1st and 3rd Defendants contend that the plaintiff's plaint does not disclose a cause of action as required by Order VII Rule 1(e) of the Civil Procedure Code. He maintained that the plaintiff's claim regarding the alleged lack of valuation before the sale of the mortgaged property is legally unfounded since there is no statutory or contractual obligation mandating such valuation. Citing Fanaka Fishnets (T) Ltd v. Stanbic Bank Tanzania Ltd & 2 Others and other authorities, they submit that the plaintiff's purported cause of action is based on an invented requirement rather than a legal right The Counsel also referred to Section 135(4) of the Land Act (Cap 113 RE 2019), which limits the Plaintiff's claim to damages, not a remedy for the sale of the property. He argued that since there is no specific claim of fraud, the Plaintiff's plaint should be rejected, relying on the Ndono Investment Ltd vs NMB Bank pic & 2 Others, Land Case No 25 of 2021. 12 In response, the learned counsel for the Plaintiff disagreed with the Defendants' contention that the plaint does not disclose a cause of action. He argued that the Plaintiff's claim is not based on the requirement for a valuation before the sale but on the sale of the mortgaged property at a far lower price than its actual value. The Plaintiff also questions the validity of the sale, asserting that there was no public auction conducted and, if one was conducted, the property was not lawfully sold to the 2nd Defendant. He contended that the issues raised are factual in nature and require evidence to resolve. He cited the case of Mchele Marco Misalaba v Mipa Co.Ltd & 3 Others (Land Case No. 44 of 2023) [2024] TZHC 214 to emphasize that the determination of whether the sale was lawful and whether the property was sold at an appropriate price is a matter of fact that can only be resolved by presenting evidence. The concept of a cause of action is fundamental in determining whether a party has a valid legal basis to institute proceedings before the court. A cause of action comprises every fact which, if traversed, would require proof at trial for the plaintiff to obtain judgment. It includes the existence of a right, its infringement by the defendant, and the resulting damage or loss suffered by the plaintiff. 13 In the present case, the defendants raised a preliminary objection, arguing that the suit discloses no cause of action against them. Their contention is that the plaintiff has not established a clear link between the defendants' conduct and any legal right of the plaintiff that has been violated, thereby failing to meet the necessary requirements for a cause of action. A cause of action is defined in Mukisa Biscuit Manufacturing Co. Ltd. v. West End Distributors Ltd. [1969] EA 696 as every fact which it would be necessary for the plaintiff to prove if traversed to support his right to judgment. The plaintiff must allege facts sufficient to show: The existence of a legal right or interest; an act or omission by the defendant that infringes or threatens that right; and an injury or damage suffered as a result of the infringement. The plaintiff alleges that the property, subject to the mortgage agreement in Commercial Case No. 1 of 2016, was irregularly sold in the execution of the decree. The plaintiff claims that the sale was conducted without adherence to proper legal procedures, such as issuing a notice of sale and obtaining the necessary court orders, which resulted in financial loss and damage. The plaintiff further asserts that the defendants acted unlawfully in enforcing the Deed of Settlement by failing to comply with statutory requirements under the Mortgage Financing (Special Provisions) Act and the 14 Civil Procedure Code, Cap. 33 R.E. 2019, particularly in conducting the auction sale of the mortgaged property. The defendants contend that the plaintiffs claim is based on issues already resolved by the court in the previous suit, Commercial Case No. 1 of 2016, through the Deed of Settlement. They argue that the plaintiff is barred from challenging the execution process since it derives from a final judgment to which the plaintiff was a consenting party. They maintain that the plaintiff has not demonstrated any specific legal right infringed by their actions that would necessitate a new cause of action, as the plaintiff is effectively attempting to reopen matters already conclusively settled. Despite the defendants' arguments, the court must evaluate whether the plaintiff's pleadings disclose a prima facie case that merits judicial inquiry. The core of the plaintiffs challenge lies in the execution process, rather than in the terms of the settlement itself. The plaintiff does not seek to nullify the Deed of Settlement but rather contends that the process by which it was executed was marred by procedural irregularities, thereby infringing upon the plaintiff's right to fair execution as guaranteed by law. 15 In Jeraj Sharriff & Sons v. Chotai Fancy Stores [1960] EA 374, it was established that when a plaintiff alleges wrongful execution of a court order or decree, it gives rise to a fresh cause of action, distinct from the original matter that was settled. The court recognizes that a cause of action must be evaluated based on the sufficiency of facts pleaded and not necessarily on the likelihood of success. The principle from Auto Garage & Others v. Motokov (No. 3) [1971] EA 514 provides that as long as the plaintiff's pleadings disclose a semblance of an actionable claim, it cannot be dismissed at the preliminary stage on the basis that it discloses no cause of action. The plaintiffs allegations, if proven, suggest a potential violation of the legal expectations under the statutory framework governing mortgage executions. The plaintiff is entitled to expect that any execution will follow due process, and a breach of such procedural fairness can form a valid basis for a cause of action. The court finds that the plaint sufficiently discloses a cause of action. The plaintiff has articulated specific legal rights that have allegedly been infringed by the defendants' conduct during the execution of the mortgage decree. The claims are not an attempt to challenge the original settlement but instead raise 16 concerns about the execution process, a matter that is inherently subject to judicial scrutiny. Thus, the preliminary objection on this ground is dismissed, allowing the suit to proceed to substantive hearing. The third point of preliminary objection faults the Plaintiff for abusing the Court Process. The Counsel argued that the Plaintiff's case is an abuse of the court process due to the multiplicity of frivolous actions filed by the Plaintiff after defaulting on the loan. He contends that the Plaintiff, after borrowing from the 1st Defendant, defaulted and then proceeded to file numerous cases to frustrate the recovery process. He cited the case of Private Agricultural Sector Support Trust & Another vs Kilimanjaro Cooperative Bank Ltd, Consolidated Civil Appeal Nos 171 & 172 of 2019 (TanzLii) at p. 26 and the case of SME Impact Fund CV & 2 Others vs Agroserve Company Ltd, High Court of Tanzania at Bukoba, Civil Appeal No 9 of 2018 (unreported) to support the argument that courts should not entertain defaulters who misuse the legal process to avoid repaying their debts. He maintained that, the Plaintiff is using the court to hide from her obligations, and the case should be dismissed with costs to allow the 1st and 3rd Defendants to pursue their counterclaim. 17 In response, counsel for the plaintiff submitted that the Plaintiffs actions are in pursuit of a legitimate grievance arising from what he perceives as an improper sale of the mortgaged property. He contends that the multiplicity of suits and applications was not intended to delay payment but rather to obtain redress for her alleged grievances. The principle of abuse of court process is grounded in the need to maintain the integrity of the judicial system by preventing parties from engaging in conduct that manipulates or misuses the legal procedures of the court. Abuse of court process can take various forms, such as instituting multiple suits on the same subject matter, filing frivolous or vexatious claims, or using legal proceedings to harass or oppress the other party. The doctrine is designed to protect the courts from being overwhelmed by actions that are frivolous, vexatious, or aimed at achieving a result not intended by the legal system In the present case, the defendants have raised a preliminary objection, asserting that the plaintiff's suit constitutes an abuse of the court process. The defendants argue that the matters raised by the plaintiff were previously settled in Commercial Case No. 1 of 2016 through a Deed of Settlement, and the current suit is an attempt to re-litigate issues that have already been resolved. 18 It is a well-established principle that courts have the inherent power to prevent misuse of their processes. However, the scope of this power must be balanced with the litigants' right to access the court to seek justice. In AG & Others v. The Times Newspapers Ltd [1974] AC 273, the court emphasized that a mere apprehension of multiple proceedings is insufficient to establish abuse of process; there must be clear evidence of a party's intent to misuse the court's procedures for purposes other than genuine legal relief. In the present case, the key issue is whether the plaintiff's challenge to the execution process constitutes a re-litigation of settled issues or is based on new grievances arising from the defendants' conduct during the enforcement of the settlement. The plaintiff's pleadings and submissions suggest that they are questioning the manner of execution rather than disputing the original agreement itself. If a party can demonstrate that new and distinct facts have arisen after the judgment or that there were procedural irregularities in the execution process, this can give rise to a fresh cause of action. As held in Barker v. Barker [1945] 2 All ER 172, a claim based on new factual circumstances that were not and could not have been addressed in the original proceedings does not amount to an abuse of court process. 19 The plaintiff's current suit alleges specific procedural flaws in the execution of the Deed of Settlement, such as the failure to provide adequate notice of the sale of the mortgaged property, lack of transparency, and non-compliance with statutory requirements. These allegations, if proven, indicate a separate and legitimate grievance distinct from the original settlement agreement. Based on the analysis, the court finds that the current suit does not constitute an abuse of court process. The plaintiff's claims are rooted in specific allegations of procedural irregularities during the execution of the Deed of Settlement, which were not and could not have been addressed in the original case. These new issues merit judicial scrutiny to determine whether there was compliance with legal requirements during the execution process. As such, the objection on the ground of abuse of court process is dismissed, and the matter is allowed to proceed for substantive determination. As a consequence, I find that none of the preliminary objections raised by the 1st and 3rd Defendants sufficiently warrants the dismissal of the plaintiff's suit at this stage. Accordingly, the preliminary objections are overruled. The matter shall proceed to trial on the merits, allowing both parties an opportunity to substantiate their claims and defences. 20 The case shall proceed to trial for full determination. Costs shall follow the event. It is so ordered. 15/11/2024 21