20040812 TZHC Dar es Salaam

i, IN THE HIGH COl0RT OF TANZANIA (COMMERG,iAL-DIVISION) .. I AT DAR BS SALAAM Ii COMMERCIAL cA~E NO. 11 OF 2002 d TANZANIA BENA CO. LtfD ................ PLAINTIFF VERSUS 'I ' BENTASH HOLDINGS LrD ........... DEFENDANT · · ----------------------- i_i ------------------------ 1I JUG~ENT KIMARO, J. The controversy between the parties stems from a sale of landed property and two crushing plants. The landed prb1perty is Farm No.2598 Tegeta: Dar-Es- d . Sala~m and is comprised of Certificate ofj :~itle No.44542. In terms of th~ testimony_ of the plaintiffs witness; one Mr. Bruno! .Gatta (PW1) ·the properties belonged to · BENNACO Company and were assigne~I to the plaintiff after BENACCO closed business in Tanzania. \ · • I' The defendant agreed to purchase the landed property . for T.shs · I, 25,000,000/=. For this item, there is no dispute. A written sale agreement and a ) transfer for the landed property were prep~~ed and signed by the parties. However, i 1 their signatures were not attested to by\ Commissioner for Oaths because of I problems which arose giving rise to the filing of Jhis suit. I I As regards the crushing plants, plea~ ngs by the plaintiff and testimony_ of one ... of the plaintiff's witness - Alessandra Gatt~ l(PW3) is that the deal for the purchase. of the landed property was inclusive of ~~e two crushing plants. Only that the I j! ,t.l,.; :., I . I agreement for the crushing machines . : as oral and the purchase pricej was USO ....... 160000. · It is also asserted bythe plaintiff!: hat the Defendant took posses~ion of the landed property and the two crushing p(Jnts after effecting part payment: for other properties purchased by him from Alistriii Company which were kept on ithe farm :,I . I The purchase of properties belonging to 1/istride was covered by. another d~al made between PW3 and DW1 - Mr..GeofreYiLohnson, the Managing Director of the Defendant. The testimony of PW3 is that ~~e sold the properiies of Alistride Py virtue of her directorship in Alistride. J I Whereas the Defendant admitted; •execution of the sale agreement and [ . . ' I transfer of the landed property, the orall, greement for the crushing pla~ts was denied. The defendant also denied taking ~Jssession of the landed property ~nd the crushing machines. •. I I The plaintiff is claiming for payment qflUSD 195,000 being the purchas~ price for the landed property and the crushing plahts. An alternative prayer is for return of the crushing plants and repossessipn of the :l~nded property as well as mesne brofits ) ~ and loss of use or damages. The plaintiff a/f prays for daily compound inteiest at 30% from October 2000 till Judgment and 1nteiest at court's rate till full payment plus costs. I The issues framed for the determinatio' 1' of the court ate ... r, .II· .I . i . " i) Whether the agreement b~twee_n the parties .was inclusivF of landed property under Title No.4~if542 and the crushingplant. ,, , ! 2 ii) Whether the defeiJaaht took possession of the lande°dp(operty. II I iii) Whether the defendaht took delivery of the crushing ma~hines. ·1, ' iv) To what relief(s) are t~e parties entitled to." I\ Both parties are represented by Le~1rned Advocates, the plaintiff by Dr. Fauz 1 Twaib of Ismail & Co Advocates and the dJfendant by Mr. Buberwa of B & B Law ' ( ; ') Partners. i1 I II '1 The testimony adduced during the tpal shows that the plaintiff is a limited liability company with two shareholders, ea61h with 50% shares. The shareholders are also the Directors. They are Bruno Gatt~.\(PW1) and France Bonnametti (PW2). Both are no longer in Tanzania. PW1 is currehtly living in Nairobi and PW2 is living in Italy. Another person of significance in the pi9tlre is Allessandra Gatta (PVV3). She is i I· · a daughter of PW1 as well as a focal point :for communication between PW1 and Geofrey Johnson (DW1 ). She is also a key pi1yer in the transaction which gave rise to this suit. Geoffrey Johnson is a Director of the Defendant. All these witnesses are persons who are well acquainted to eac~j other and they have a per1onal relationship. In particular PW1, PW2 and •iIDW1 worked together in Bennacco sometimes in 1990s before each one moved M ! other activities but they have known : each other for years. l1 I I The testimony on activitie~ which cu.lmihated into this suit is as follows. The defendant deals with the business of hire of htlavy equipments e.g. bulldozers and l others for building roads. That is earth moving equipments. He visited PW1 at ',his 3 I I house in Nairobi and indicated an interest i8 hiring a store and crushing plant! as well ... ,:,i · , are as· renting· a workshop. All there propert,e· · on the landed property. ·--"-~ -Because 1.. -.: - PW1 needed time to make quotations, no lbcision was made there and the~. DW1 had to leave without an immediate answerJjom PW1. PW1 prepared the qu~tations for the hire of the crushing plants, store ~~-- well as the quotations for renti ng the 1 workshop. The quotation was tendered and lbmitted in court as exhibit P1. 1 i I After the preparation of the quotationsi''. PW1 tried to get in touch with D11 through the phone but he could not go throug!H. ,. ,, He then faxed the quotations to Ihis 1 daughter (PW3) for transmission to DW1. I I I Before a decision was made by DW1; he_ got involved in negotiating ~ deal with PW3 in_ relation to the purchase of pro' ,:erties ·belonging to Alistride Ltd. jPW3 i 1 was a Director of the company. The compa~ was a construction company ~hi9h :J . I wanted to purchase machinery belonging to-.·frlistride for his company. During the negotiations for the deal, Alistride was a ten: 1.-- t in the landed property and all th.e . I machinery were on the land. The parties man,Jged to come to an agreement for the .; I purchase of the properties. I I I I It was after the completion of the negotia: ions for the purchase of the Alisthde property, that DW1 informed PW3 that he JJs no longer interested to hire fthe machines and rent the workshop. Instead, he :~anted to purchase the land and ~he crushing plants. PW3 said an agreement for sa/~.I' of the. landed property was agrJed I upon, the purchase price for the farm being T.sij, 25,000,"000/=. . .: 4 1 I . ,. As for the crushing machines, PW3 [, aid they made an oral agreemert with OW1 and DW1 agreed to purchase the samhl'for USO 166,000. PW3 communicated with her father (PW1) and informed him a~~ut the results of the deal and iasked whether it was acceptable. PW1 said the debl was acceptable and he too cod,sulted PW2 on the matter. PW2 responded positiveM_ . '. · I. I OW1 on the other hand admitted the agreement on the purchase of the farm : at T.shs 25,000,000/= but denied that there ,£as an oral agreement for sale ~f the crushing machines. OW1 also admitted thaL~e made an agreement with PV\11 to i purchase Alistride property. ) \ I Both PW1 and OW1 testified that the1purchase price for the farm ha~ not been paid and they conceded that a caveat hJ been entered in respect of the farm. 1 , While PW3 insisted on the oral agreement· i(br sale of the crushing plants bw1 denied it totally. OW1 said the price of the far.~ was USO 160,000 and the direttors wanted the amount to be paid to the two Oifi!ctors of the plaintiff on equal basis outside the country but he refused. He said t~i Directors would have given hi~ a 1,1 . receipt for T.shs 25,000,000/=. He denied that:the . amount of USO 160,000 wa$I for ·the crushers. · I . I In her testimony, PW3 told the court that: W1 and herself exchanged a lo~ of e-mails on the purchase of the farm and the crJ1hers. The.e-mails were tendered in court and admitted as exhibit P2. According toifW3, DW1 went into possessio~, of the farm after part payment of the properties pJnchased from Alistride. He also took 1:1 I delivery of the crushers. PW3 said that was. do1e on the basis of trust and becau se '. 1 the Alistride property was paid for and it was .I a~ the farm. However, OW1 deni~d · I taking possession of the farm and the crushers. ~ ,\ - 5 I ' I i i I I I In a nutshell, that was the evidence VI :icliWas tendered during the trial.r. ······ In his final submissions Mr. Buberwk\ for the defendant submitted that the plaintiff's suit must fail because the whole trat}action was geared towards eva~ion of payment of taxes. As such it was void ab iiltio. He said this reason explain/; why only one written agreement was made by t~l parties while the evidence ten~ered show that the plaintiff is referring to two itemi: the landed property and the cru~hers. Mr. Buberwa said that even lhe w;itten agre~ment reflects a small value whil~ the plaintiff is claiming for a lot of money. He mad~ reference to section 23(1) of th~ Law of Contract Act 1961 and the cases of Zakaria-Barie Bura Vs Theresia Maria Jotin . i . I Mubiru 1995 TLR 211, Hamed Baali Vs Ha~ed Batwahsaff 17 KLR 30, lsia V Michael &Co 23 (1) KLR 12 andSuryakant,~. Ramji V Savings &Finance L\d & 3 others Commercial Case No.30 of 2000 (un~eported) arguing that in all the c~ses, the court held that contracts which are taunte~lwith illegality are void ab initio. :.The . {! last cases cited put emphasis on strong obligation for all citizens to ensure that they I I make true and faithful returns for tax purposes. I I I Mr. Buberwa made reference to the Law Of Evi~ence Act 1967 and argued i that once a contract is written it cannot be varied· by either addition or contradictiorl . I by oral evidence. (Section 101 of the Act). : I In reply Dr. Twaib submitted that Mr. Buberwa's submission on the ill_egality: of the contract because of tax evasion is unfound~t because no evidence was led)to support his submission. I quite agree with Dr. rJiib that no evidence at all has be~n led to support what Mr. Buberwa submitted in ,Wis winding up submissions. It his been repeatedly held in various cases that subJiisions must be confined lei what lis , l 6 I' j' on record. I refer to the case of Vidyrthi v/ Ram Rahka.(1957) EA 527 which I ·1, . conforms th1s--p··osition. · ·.. -:I' · I' I' Dr. Twaib submitted further that the evi,d1ence on record shows that two items were involved in the sale transaction; the farm and crushers. In terms of Section I/ · 41 (1) of the Land Registration Ordinance (now Land Registration Act) Cap.334 it was mandatory for the sale transaction involv,/1g the farm to be in writing. Therefore, it was done for purposes of compliance withir law. .1 . Co.mmenting. on the case ~f z_akari~f Bura V Theresia _Mu.biru (supra) Dr. Twa1b said even 1f the court will fmd t~at the agreement 1s illegal and thus unenforceable, it will be just and proper tb/ have the parties be restored to their position quo ante with the defendant retuml1~g the landed property and the crushing machines and paying compensation for m~~ne I, profits. The court - wm. determine on I, I' this point on the prayers. /, I' As regards the submission on writtien and oral contract, Dr. Twaib submitted that what the evidence on record shows ;'i.k that the agreement for both it~ms was made on the condition that the land and #e two crushing plants were considered as .l one transaction and so there is no quest\dr:1 of the oral contract adding or varying or contradicting the written agreement althbJgh r he agreed with the principal .of the law in Mr. Buberwa's submission. I 1· I , On the first issue Mr. Buberwai' Ubmitted that the plaintiff has hot proved ownership of the crushing plants and aui.l.mails tendere.d in court are concerned with 1 1 sale of plant and equipment belong i~g to Alistride Limited. Accord ing to Mr. 1, .i' !' ,,I I 7 ,, ' ii Buberwa, this offers an explanation why tme crushing plant was not included in the I sale agreement of the farm. Ii' ·· !1 Dr. Twaib replied that there is clear Jvidence by the defendant acknowledging the transaction under Para 16 of the amend~d written statement of defence ~nd the annexed copies of correspondences writte~)by the Directors of the Plaintiff directing the Defendant to effect payment in acco~bance with the agreement. Dr.', Twaib submitted further that the impression which:lthe correspondences give is that there . !' i : . was consensus of mind of the parties and all ingredients of a valid contract existed. The Defendant should be estopped from ~lnying the representation made ·:to the plaintiff. I I. Making reference to the testimony of i'.Je Defendant in court on 5/07/2004 Dr. Twaib said the defendant admitted having ~greed to purchase the farm for: USO f.1 I 160000 and he has not yet effected payment 1 : i; . I; I During the trial, evidence was led sho' ing that the defendant wanted to pay. 1 u ' However, his intention was bogged down becaµse of Civil Case No.433 of 1999 filed by one Bruno Frenzoni who entered a caveat a~ainst the land in dispute. . i, I' The analysis of the evidence which w~s tendered in court leaves no doupt that the agreement between the parties was (~elusive of the landed property u~der title No.44542 arid the crushing plants. As tbrrectly submitted by Dr. Twaib1 the written agreement covering the farm could ~bt have been effected in any other manner. The law requires the same to be in writihg. . , · I !,,, Ii 8 iI i I According to the defendant himself ald the other witnesses, the partie~ know each other for a· very long period. It is th!Jrefore- not a surprise to have Jn oral · ··---'"- agreement for the purchase of the crushi~i plants. It was not expected that the Defendant would change his position given \lhe relationship which existed b~tween the parties. ·l Ii 1 The ~xcha nge of the e-mails between W3 and DW1 tells it all. That the: sale transaction included two items; the farm and tHe crushing plants. There ,s no way in I1 :l which the Defendant can disassociate himse1J_ .· ith what took place The questio~' of i ownership raised by Mr. Buberwa is of no assil~ltance to the Defendant. The ans~er to the first issue is positive. \· ': · As regards the second issue Mr. Bub~, a submitted that the defendan't has not taken possession and the crushing plan\;1 belongs to Alistride Limited an~ that there are cases involving the disputed prope~y. He submitted further that a s~arch u conducted at the Ministry of Lands show that the land is still in ownership of the I I Plaintiff. I Dr. Twaib submitted correctly that the ef-mails exchanged between PW31 and DW1 draws a conclusion that the defendant Jook possession. That is precisely so. PW3 said the properties of Alistride sold to t~J Defendant were on the farm w1hich i' I forms the subject matter of the suit. It was afte~ the Defendant had partly paid fo~ the properties that he was allowed to take possesswn of_ properties. The crushing pl~nts were also on the farm. There are also the e".1mails exchanged between PW3 and DW1 and in particular the e-mail dated 22nd Fe!8ruary 2001 which showed that ~hat remained unfulfilled is payment for the farm and }he crushers. 11 PW4's testimony also shows that it w1 the Defendant who took over lhe responsibility of payment for the security servic~l offered in respect of the properties which were on the farm. If he .was not in poss~J1s_ sion of the farm and the crushing· ·I , plants why pay for security services for_ those pr9'· erties? 9 l f '· ·,I,:.", . I would also agree with Dr. Twaib th.at the fact that the land is still in the i ownership of the plaintiff does not prove that the I defendant did not go to possession. Mr. Buberwa must have confused between !ownership and possession Dr. Twaib pointed out correctly that the transaction involying the disposition of the farm had not i been completed. Transfer had not been effe9ted. That is why the plaintiff is asking for among others specific performance. The dJfendant to effect payments. I I I As regards the caveat the evidence shows clearly that the case has been ! settled. It is only a matter of making a follow UP, to ensure that the caveat is up lifted. Under the circumstances issues number two a~d three are answered positively. I i I I I I, Lastly is the reliefs. The plaintiff having proved its case on the balance of probabilities judgment is granted for the plaintiff !for payment of USO 195,000/-. i I I, In the event of failure to honour prayer (a) the defendant should return the 1 1 farm and the two crushing plants to PW1. In ad~ition, the Defendant should also pay mesne profits on the landed property at USO 1000 p.m. till delivery of possession. I The prayer for loss of use is not accepted beqause no evidence at all was led to support this prayer. The plaintiff is also granted\ interest at 20% per annum from 1st October 2000 to the date of judgment and thereafter interest at the courts rate of 7% ! till full satisfaction plus costs. I ! N.P.KIMARO, I JUDGE I I 9/08/2004i .l Date 12.8.2004 Coram: Hon. N.P.Kimaro, J. For the Plaintiff- Dr. Twaib. For the Defendant- Dr. Twaib/Mr. Buberwa. CC: R.Mtey. Court: Judgment delivered today. Order: . l 1. Judgment for the plaintiff for USO 195,opo. . . I - 2. Alternatively, the defendant should retu~n the crushing plants and the plaintiff will be allowed repossession of the farml 1 3. The plaintiff will also be entitled to mesn, profits at USO 1000 p.m. till delivery of possession. I ·, 4. The plaintiff is also granted interest \at 20% from 1st October 2000 till I I judgment. Thereafter interest to be : 1at the court's rate of 7% tm full I satisfaction. I I 5. The plaintiff is also granted costs. i I ': l N.P.KIM/l:FRO, I JUDG~i 12/08/2004 I i 1Cln;_(1u at 1.-, · ,, 1 n7s'_fs' a' t.f{/e' a'f;J Corfee°fl l Ofthe:O'r-'g•·r· d . . , _ 3, 185 - words I ' -,, ,..,r ·er Ju'd'gcem:en·t R·"'r'1:• .., S/g:1 .. :__ ' 'u, in~' ~:~ ~,~;:r_ -~~~~~ii,"D;'~.: ·'""~ jd. -- -r -· -- -/ .9_,~-·r"~·-::,.;.1 -- - ·· I I 11 .1