tanganyika christian refugee services vs n a osman 2014 tzhc 2118 9 january 2014

IN THE HIGH COURT OF TANZANIA

IN THE DISTRICT REGISTRY OF MWANZA

AT MWANZA HC CIVIL APPEAL NO 02 OF 2006 (Originating from Mwanza RM's Court Civil Case No.34 of 2003) TANGANYIKA CHRISTIAN REFUGEE SERVICE...........APPELLANT

VERUS N.A. OSMAN................................................................ RESPONDENT

JUDGEMENT 13/12/2013 & 09/01/2014 SUMARI, 3. This is among the appeals which have been pending before this Court for a considerably number of years now. The appellant's appeal was firstly filed in this Court way back in 2006, the stumbling block which made the same not to be disposed off to its finality is among other things, irregularities that appeared on the face of Court's record, that is, the date of the decree and judgement did not tally. Hon. Mackanja, J (as he then was) noted that and decided over the same in 2008. i Before I* venture to discuss the merits or otherwise of this instant appeal, it is imperative to reduce though in a nutshell, the facts of the case:- That on 26th August, 1999, the Tanganyika Christian Refugee Service brought a suit against N.A.Osman Ltd before this Court vide HC. Civil Case No. 50 of 1999 for recovery of balance of 106,294 liters of fuel or its equivalent value plus transport charges thereof; interest at current bank rates; costs and other reliefs the Court may deem fit and just to grant. In retaliation, the defendant brought a counter claim in which she inter-alia claimed a liquidated sum of TZS 33,514,359.00; reconciliation of accounts, interest on decretal amount at the Court rate. It seems that the said suit was settled ex curiae, and the terms of that settlement were recorded accordingly. In short, under the terms of that agreement

the respondent bound herself to deliver to the appellant 106,294 liters of diesel. On her part the appellant undertook to pay to the defendant the sum of TZS 6,518,975/= plus interest. Apart from the said settlement this Court ordered that the counter claim raised by the respondent in this appeal, N.A.Osman Ltd to be proved in a separate suit. After the said order of this Court, N.A.Osman Ltd instituted a case in the Resident Magistrate Court of Nyamagana, RM Civil Case No. 34 of 2003 claiming a total sum of TZS 34,512,818/= being amount for supply of oil products to the appellant from 1994 to 1996 respectively. After full trial the trial Court held in favour of the respondent by ordering that theappellant to pay TZS 23,368,080/= to the respondent. This was decided way back in 31/10/2005. Being aggrieved with the trial Court's decision the appellant through his advocate. Mr. Butambala, learned counsel appealed to this Court, but his appeal has been pending for quite some time, as I have thoroughly explained above, setting forth four grounds of appeal, as follows:- 1. That the learned trial Magistrate erred in law in holding that the appellant has refused to reconcile the accounts while there was no evidence adduced by the respondent to support these findings.

2. That the learned Honourable trial Magistrate erred in law in awarding damages to the respondent while there was no evidence adduced by the respondent that he has suffered any damages. 3 In reply Mr. Magongo submitted that, though the appellant counsel argues that the non delivery of fuel by the respondent is the source of this case, this Court in the Civil Case No. 50 of 1999 has already dealt with the said matter. He insisted that the issues in this case can be gathered from the framed issues, that is, nonpayment by the appellant for supply made by the respondent. I think the epic centre of this ground of appeal should only be that the trial Court erred in awarding damages to the respondent while the- same was not proved. I have gone through the entire decision, and my eyes have failed to point out something like damages in the trial Court's decision. I wonder where the appellant's counsel got it. Nevertheless, upon my carefully perusal I noted that, the order for damages referred to by the appellant's Counsel, might have been construed from the last paragraph of the trial Court's judgement which reads that, " I hereby enter judgement in favour o f the plaintiff to the extent o f 23,368,080 as payment o f fuel supplied, and the rest as per plaint". I is really amusing as to what does it amount to the rest as per plaint? That is the vexing question which considerably tasks

my mind. I think one could certainly say, the rest as per plaint, cutters for other reliefs that the plaintiff has been seeking to be granted by the trial Court, these includes; a. N/A. b. Interest on (a) above the commercial rate from November, 1994 until judgement. c. General judgement for nonpayment of Tsh. 20,000,000/=. d. Interest of the decretal amount at Court rate from time of the decree until payment in full. ' e. Costs of the suit. f. Any other reliefs or further reliefs this honourable. Court may deem fit. That being the position, I join hands with what was submitted by Mr. Butambala learned counsel that, the trial Magistrate grossly erred in holding so. It has always been the trite and remarkable law that general damages are awarded at the discretion of the Court See M/s Tanzania China Friendship Textile Co. Ltd Versus Our Lady Sisters of Usambala, Civil Appeal No.84 of 2002(CA). To clinch it much I should insist such discretion should not be used without rhyme or reason. It is astonishing to learn that the trial Resident Magistrate have with a calculated conspiracy of silence, buried his head in the sand like ostriches, pretending that he is unaware of the principles, purpose and rationale of granting damages. It was stated in Livingstone v. Rawyards Cool Co. (1880) 5 App. Cas. 25 at page 39 by Lord Blackburn that "sum o f money which will put the party who has

been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation" Elaborating on that principle Asquith, U, in Victoria Laundry v. Newman [1949] 2 KB 528 at page 539 said that the purpose of damages is to put the plaintiff"... in the same position; so far as money can do so, as if his rights had been observed." Again, a trial court which has seen and heard the parties is certainly in a far better position to assess damages than an appellate court can do. Lord Wright in Davies v. Powell Duffryn Associated Colliers Ltd. [1935] 1 KB 354, 360, referring to a decision by Greer, U, said - "In effect this Court, before it interferes with an award o f damages should be satisfied that the Magistrate has acted on wrong principles o f law, or has misapprehended the facts, or for these reasons or other reasons made a wholly erroneous estimate o f the damage suffered. It is not enough that there is a balance o f opinion or preference." In this instant appeal l am not considering the propriety of an award of damages by the trial court but this excerpt quoted above merely helps to remind us that we must not misapprehend the facts and must be careful of the estimate we make of the damages. Thus, as rightly submitted by the appellant's counsel before the trial Magistrate issued damages

he was required to consider whether the respondent had really suffered the same or not. Consequently, this ground is founded. As for the 2nd ground of appeal, Mr. Butambala, learned Counsel vigorously submitted that the respondent filed the suit in August, 2003 claiming interest at the commercial rate from November, 1994 till judgement. That the trial Court awarded the prayer to the respondent. He was of the opinion that the Court erred in doing so, as in law interest prior to the filing of the suit is the matter of substantive law and not procedural law, as such interest must be specifically pleaded. He referred the case of Francis Andrew versus Kamyn Industries (T) Ltd (1986) TLR 31 and the case of Yusuf Abdullah Gullam Hussein Versus The French Somaliland Shipping Co.Ltd (1959) EA. «* Crowing it all, Mr. Butambala, learned'counsel intensified-that there was no mercantile usage or practice established by the respondent for payment of such interest. The loophole made by the trial Court in not specifying the rate of interest to be used, allowed the respondent to file execution by computing interest rates at his own whims. He invited this Court to take judicial notice of Misc. Civil Application No. 308 of 2005 whereby the respondent started to compute interest at the rate of 40% from 1996 and changed the same to 36% by July, 1996 of which turned to 33% by January, 1997. He

cemented that all this was trigged after the trial Court awarded an omnibus judgement. Responding on the same, Mr. Magongo, learned Counsel made gallant efforts to challenge what was submitted by the appellant's counsel stating that the appellant's counsel is disputing the interest awarded between 1994 and 2003. That going through the case of Yusuf Abdullah (supra) it would appear the respondent was entitled interest at the commercial rate from August, 2003 when the suit was filed and not prior to that period. He stated that, in Mulla Code of Civil Procedure, 15th edition on that. The law that governs interest in our civil jurisdiction can clearly be seen under Section 29 of the Civii Procedure Code, provides that:- Section 29 - The ChiefJustice may make rules prescribing the rate o f interest which shall be carried bv judgment debts and, without prejudice to the power o f the Court to order interest to be paid up to the date o fjudgment at such rates as it mav deem reasonable. every judgment debt shall carry interest at - the rate prescribed from the date o f the delivery o f the judgment until' the same shall be satisfied.( emphasis supplied) The question now, is what is Judgement debt, the same is answered by Order 20 Rule 21(2) which provides that, a judgement debt means;- a. The principal sum; b. Any interest adjudged on such principal sum for any period prior to the

institution of the suit; and c. Any interest adjudged on such principal sum for the period between the institution o f the suit and the delivery o f the judgment. It goes without say therefore that, a Court can issue interest adjudged on such principal sum for the period prior to the institution of the Vol.l at page 316 there is a comment that, the rate of interest from the rate of the suit to the date of decree is the discretion of the Court. He finally stuck on his guns that/ Section 29 of the- Civil Procedure Code, Cap 33 (R.E.2002), gives discretion to the Court to award interest and no ground has been shown to assail that discretion. As I have remarkably stated above, an award of the interest to the respondent was contained in the last paragraph of the trial Court's 'judgement in the phrase, and the rest as per plaint". Interpretating the said phrase, one could say that, the trial resident Magistrate apart from awarding the respondent the specified amount claimed to the tune of TZS 23,368,080/=, the Court awarded him every reliefs that he sought to be granted as averred in his plaint. Now, looking at Mr. Butambala's submission the same is basically centered on two folds, first, the award of interest prior filling the suit that is from 1994 to 2003, and secondly, the interest so granted was not specified. Going through the first fold, the issue is whether the Courts are

not allowed to award interest prior filling of the suit. It is important to address 10 on that. The law that governs interest in our civil jurisdiction can clearly be seen under Section 29 of the Civil Procedure Code, provides that:- Section 29 - The ChiefJustice may make rules prescribing the rate o f interest which shall be carried bv judgment debts and, without prejudice to the power of the Court to order interest to be paid up to the date o f judgment at such rates as it mav deem reasonable, every judgment debt shall carry interest at the rate prescribed from the date of the delivery o f the judgment until the same shall be satisfied,'( emphasis supplied) The question now, is what is Judgement debt, the same is answered by Order 20 Rule 21(2) which provides that, a judgement debt means;- a. The principal sum; b. Any interest adjudged on such principal sum for any period prior to the institution of the suit: and c. Any interest adjudged on such principal sum for the period between the institution o f the suit and the delivery o f the judgment It goes without say therefore that, a Court can issue interest adjudged on such principal sum for the period prior to the institution of the suit. A proper construction of the said provision of the law and the position as I see it provides for two periods of interest divided into three types:- The first period covers for the interest

adjudged on the principal sum from any period prior to the institution of the suit and interest on the principal sum adjudged from the date of filing the suit to the date of the decree, and the second period covering the third type of that is, interest on the aggregate sum from the date of the decree to the date of payment in full. This is also a position under Section 26(2) of the Uganda Civil Procedure Act. See Lwanga versus Centenary Rural Development Bank [1999] 1 EA 175(CAU)). Hon. Mfalila, JA (as he then was), in the case of Said Kibwana and General Tyre versus Rose Jumbe (1993) TLR 175 (CA) held that:- The rate o f interest prescribed under powers conferred on the ChiefJustice by s 29 vide GN No 410/64 are the same as those prescribed under O. 20 R. 21 namely between the minimum o f 7% and the maximum o f 12% per annum from the date o f the delivery o f judgment until satisfaction. The rate o f interest to be awarded for the period prior to the delivery o f judgment is set at the discretion o f the Court. The rate which it considers reasonable. There are thus two divisions o f interest under Tanzania Law as opposed to three under s 34 o f the Indian Civil Procedure Code which ceased \'to apply in Tanzania in 1966. These two divisions correspond to the period for which interest is awarded. The first period covers the whole o f that period up to the delivery o f judgment.

The second period is the period from the delivery ofjudgment to final satisfaction. The rate to be awarded for the first period is entirely at the discretion o f the Court, whereas the rate to be awarded for the second period is also at the discretion o f the Court but within set limits ie between 7% and 12% per annum. Although for the purposes o f fixing interest rates there are only two periods, the first period can be subdivided in two:namely the period prior to the institution o f the suit and the period between the filing of the suit till judgment In the present case the learned Trial Judge awarded interest at the uniform rate o f 5% per month from the date o f filing the suit to the date o f full and final payment The Judge therefore consolidated two distinct periods, the one before and after judgment Could the Judge properly do this? This is the basis o f the two complaints in the memorandum of appeal. The two periods as we have already indicated are governed by different methods of fixing the rates o f interest One in which the Court has 13 gfck- complete discretion, and the other where the Court's discretion is bound within a limited area. We do not think in the circumstances that the two periods could .be consolidated and treated as one for the purpose o f fixing interest rates..."{ emphasis supplied). Having stated all that, I am certain that the Courts of law

are empowered to issue interest adjudged on the principal sum from any period prior to the institution of the suit. However, considering the second limb in the submission of Mr. Butambala, learned counsel, that the trial Court erred in awarding interest without specifying the same, I found this ground to be meritorious. In his decision, the trial Court Magistrate did not specify the interest rate that the appellant is subjected to pay. This is a very awkward decision and as it leaves a vacuum or loophole for the judgement debtor to enrich himself by imposing any interest he or she thinks fit. The trial Court had a duty to ascertain the rate of interest an appellant was supposed to pay. The respondent took an advantage of the said loophole keeping on changing the interest rates from 40% in November, 1994 to 36% in July 1996 also by the trial Resident Magistrate erred by _not being certain or specific in awarding the rate of interest and failure to safeguard the law on interest as provided for under Section 29 and Order 20 Rule 21(2) of the CPC(Supra), ♦ Finalizing his submission, Mr. Butambala, learned counsel stated that the contention that the appellant refused to reconcile the account was improper. That the appellant's witness at page 14 clearly stated that such request was not made and refused. He insisted that the trial Magistrate merely inferred it while he had no reasons

to make such inference and that his findings were not supported by evidence. In addition to that he stated, while giving evidence PW1 tendered five(5) invoices to support his case, these invoices I amounted to a total TZS 17,454, 600/=. Furthermore, the respondent stated in his evidence in chief that he was claiming 9528$ which was equal to TZS 5,812,050 by then. However, the trial Court award TZS 23,268,050/= as payment for the fuel. He finally prayed that this figure was wrongly arrived at and the same has to be reviewed and corrected. To my dismay, Mr. Magongo, learned Counsel, did not submit on this Indeed, after going through the trial Court's record, I am satisfied that Mr. Butambala, learned counsel has missed a point in computing the amount the respondent was claiming before the trial Court. When making his testimony the respondent inter-alia stated as follows, as I hereby quote; When we stopped daily business I had not been paid all the money. I still demand some money from them. The amount I demand is TZS 34,572,818/= from that they agreed to pay 6,517,975/= thus I demand from him 28,540,845/=. The amount is due to the sale o f fuel, water transport and transport itself which amounted to US dollar 9,528 which was equal to 5,812,080 by then. I have sent invoices and delivery notes so long..." What Pwl stated is self explanatory, that she was not claiming

TZS 34,572,818/=from that claimed amount the appellant agreed to pay TZS 6,517, 975/=. That the amount claimed included 9,528$ being amount for transportation. Therefore 9,528$ was not the total amount claimed as the appellants counsel suggest. Since it is the duty of this Court to leave no stone unturned, it is wise therefore, if this Court ascertain and compute what is the actual amount 16 claimed by the respondent-and whether the trial Magistrats erred in granting the same. As I stated earlier above, when the respondent filed his suit he was claiming TZS 34,572,818/= but it was found that TZS 6,518,975/= as already settled by the two contending parties in their consent agreement, consequently the respondent was claiming TZS 28,053,843/=.The respondent tendered the following invoices:- 1. Invoice No. 1871 of 04/11/1994 = 3,990,000/= 2. Invoice No. 1874 of 07/11/1994 = 3,192,000/= 3. Invoice No. 1879 of 17/11/1994 =3,990,000/= 4. Invoice No.1883 of 23/11/1994 = 3,192,000/= 5. Invoice No.1884 of 24/11/1994= 3,192,000/= 6. USD 9,528= equivalent to = 5,812,080/= Total 23,368,080/ = I think Mr. Butambala went astray in making mathematical calculations of the total amount claimed. I see no need of faulting the trial Magistrate findings in this aspect. 17 For the reasons stated above, I uphold the appeal against the anonymous rate of interest awarded by the Trial Court. As such I

hold that the Trial Magistrate was wrong to grant interest or to award interest at the anonymous rate. I accordingly set aside the order for interest that was awarded by the trial Magistrate. I order instead that, the principal sum of Tshs. 23,368,080/= awarded as specified amount, shall carry interest at the rate of 7% per annum from the date of judgment to the date of full payment. The appeal has succeeded to that extent. No order for costs. A.N.M. SUMARI

JUDGE

AT MWANZA 09/01/2014 18