20130625 TZHC Dar es Salaam

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IN THE HIGH COURT OF TANZANIA (LAND DIVISION) AT DAR ES SfiiAAM LAND CASE NO. 101 OF 2005 1. KARIAKOO BAZAA LIMITED ............... ; ............ 1 sr PLAINTIFF 2 ..MI NAB HAJJ 0. ISSA .......... .......................... 2ND PLAINTIFF ......, , ' , .

VERSUS ; l • 1. NATIONAL HOUSING CORPORATION ....... : ....... isr DEFENDANT 2. DESTIM - - ....-............... :...,I.....-2N □ DEFENDANT ENTERPRISES CO. LTD - . 10 - JUDGMENT __ - /'1\ZIRA Y, J: ; The ·first plaintiff a body corporate established under the companies ordinance cap 212 of the laws of Tanzania with its head office in Dar es Salaam and the second·: plaintiff a natural person living and working for gain in Dar es Salaam are both tenants ·of the ·first "defendant 1n its property at plot No. 22/3 l along Narung'ombe/Swahili street, Kariakoo, Dar es Salaam in apartments Nos. 004 and 005 respectively. Apparently in November 2006, the l st defendant served upon the plaintiffs nQtices of terminatioTT of their tenancies'· on reasons that the l st defehdant wanted to redevelop the suitipremises after having entered into a joint venture agreement ~ .\t . ~-:@ with the second defendant for the said development. In this suit the plaintiffs are seeking for a declaratory order that the. notices terminating the tenancy are null and void, an order that the ·. \ .. r joint venture agreement between· the defendants, be cancelled, an-\~ order that the first _defendant ·con\inue to recog·~'lze the plaintiffs as its tenants and to :receive its rent from them- wrfhout interest on the ' rent arrears, fen era I damages for each of the plaintiffs from the defendants jointly or

sever:ollygnd costs of the suit. The first defendant q -statutory public corporation established under ·i}:/\-J:11 the National Housing Corporation Act, 1990 the Act No. 2 of 19908,k{~N 2 ~ 1i ~- .,- If f )!' J', . the laws of Tanzania and the second defendant a purported body i ,. ~ corporate established under the companies ordinance cap. 212 of ~ ,, [ the laws of Tanzania, with its offices in Oar es Salaam, in their joint t written statement of defence to the amended plaint attacks the I I plaint and counterclaimed for an· order_ of eviction of the plaintiffs i ,,: ~ from the suit premises and damages for wrongful occupation of the demised premises. The defendants therefore prays for dismissal of fl the pldfhtiffs suit, with costs and judgment be entered for the ;, i defendor1ts as follows; an order of immediate eviction of the ,.,.,, 1 plaintiffs Oh the suit plot, general damages with interest at the rate oL 1l 25% from April 2005 to the ~ate of Judgment, interest at the rate of 12% from the date of judgr:nent to the date of. payment in full and costs of the suit. The plaintiffs ' were represented by Mr. Mabere Marando learned counsel and Mr-S. Ritha Chihoma Learned Counsel respectively and the defendants were represented by MS. Ndigwako learned counsel 3 1 ',·~, •r ·f--1'!~ and. Mr. Sylvester Shayo Learned Counsel. All Learned Counsel: agreed on the following issues to be

determined by the court . .i (a) Whether the Notices to quit served on to plaintiffs are illegal and unjustified as alleged. '' (b) Whether the joint venture Agreement between'• l st and 2nd _Defendant to redevelop Plot No. 22, Block 16/3 is wrongful as alleged. c) Whether the plaintiffs are entitled to compensation and damages for any wrong suffered. (d) Whether the qefendants are entitled to vacant possessiofb and damage from plaintiffs for continued wrongful occupation of the plqt. • I I e) What .pther reliefs are parties entitled to. The plaintiffs claim is based on the evidence that the notices of termination of the tenancy were wrongful and null and void, the joint venture entered 9y the defendants is null and void for failure to 4 r,.,. -1 f-r,: follow the law and regulations, and that being long sitting tenants ~ . 1 who have been paying rent and maintaining the premises state of repairs regularly it was not justifiable for them to be notified to st vacate premises to pave way to a joint venture while the 1 ' plaintiff did apply for joint venture with the 1st Defendant, but the said ' ' application was refused on discriminato~y and unfair grounds and it is contrary to the constitution of the United Republic of Tanzania. ·--J' According to tl,e plaintiffs as sitting tenants they were entitled to pre- ,.,._ emptive Rights of first refusal. In support of the above, Pwl

._Fahrni Abdallah Ali one of the Directors-r~ of the Plaintiff Company stated that they have b,een tenants in the . . suit premises since_ year 1977. Pwl further stated 11th at the last lease st they executed was in 2006 · but ·the same is still in custody of the 1 defendant and that they pay rent regularly and they have never defaulted paylng r~nt, further to that they have never breached any term of the \ease. Pwl went on to state that, in the end of the year ,. :·i 2006, the land lord (first defendant} gave them six months' notice to vacate the suit premises. Pwl produced the notice to quit served ,, .•. i Y.i 5 ,r--,,,, l ,--•- 1 ,, '!/!If:~~·.------------- ; f G4S- ·..ti! ~ upon them, as exhibit Pl.' According to him they were not satisfied : ,, ' I with the notice to quit because they have been tenants for a long time, observing all the tenancy conditions, including paying rent . . Pwl added that the landlord·. did not give them an ·offer for compensation for vacating the suit premises. He further _stc;:ited that after Novvr0ber 2006 they tried to pay rent but the NHC refused to accept rent however they are ready to pay all the arrears if their :, ·~ . rent is accepted. Pwl further asserted that before they were served with notice to quit they applied for joint v~ntu~_e in the re-development of the suit plo~ ... · but the first defendant replied that, they have already

executed an agreement with onother person·: for joint ventu:rEy so they (plaintiffs) have to secure qnother plot if they are still interested. In making a ... follow: up the plaintiffs realized that the first defendant entered a joint ...... \ > ! venture with. . the second defendant. Pwl went on to state that at the I time the second defendant made an application for joint venture with the first defensJant, the second defendant's company was not legally in existence. According to him the second defendant's 6 _ company was incorporated on l 6/6/2004 and the application for joint venture was accepted on 5/4/2004. It is Pwl 's further contention that they were not satisfied vyith the ' grant of the joint venture to the second defendant because t.hey did not know t~e criteria used to accept them as the plaintiffs were sitting tenants t with long .experience in business. While . the second . -~ defendant was not even incorporated as o legal company. Pwl ' further stQted ,..._ that, the first• pla.intiff was paying rent promptly and had been tenants for a ·long time so it was not proper for the l st defendant to refuse their• opplication and on the other hancL 10 execute the agreement with the second defendant. In cross examination Pwl went on to oAswered that the plaintiff has a tease agreement with the first defendant that they pay rent ' promptly and their agreement is oral.

According to him the last month they paid rent was in November 2006. In another question he answered that the plaintiffs do not object for the redevelopment ;~ that is why they aP,plied for the joint venture. Further to another 7 ... _ question he adds that they are not obiecting to the notice ·but objected to vacate the suit premises. Pw1 further apprised the court that they have not been paying rent . ·. . because the first defendant has refused to accept rent tmd that :· \· ·-i-.,.•· . st they are ready to pay rent any moment so long as the 1 defendant accepts rent. \n yet another question he answered that, his busine3s is not progressing well as it used to ofter the notice and that if they be evic~ted the loss will be- great because their business name has been built while they are in the suit premises. \t is ·further stated that 1 the issue of joint venture is. riot spelt in the lease but their point is as_ 0 long serving tenants observing a\\ the tenancy conditions they deserve first priority. In further cross examination Pw1 contended that the landlord advertised sb that first priority is considered to a long serving tenant and that they have not instituted that case out of jealousness but the procedure to award the 2nd defendant the joint venture agreement ,· ' was faulted. Pw1 further claimed that their financial mussels were ,, 8 .... . sound compared to the 2nd

defendant and that the plaintiff had long experience in business, additionally the plaintiff's capital is sufficient .to enter into a joint venture business of redevelopment with the first defendant. ' . Farida Jafferoli Ramji (PW2) in her testimony testified that her mother (now defeased} was owner of the suit premises and she haS been living there since 1978. According to her the plaintiffs -have been living in 1~$ suit premises since the owner was the Registrar of Buildings and they have been there for 38 years now. She concedes to have received a six month~'. notice to quit and was subsequently_lO evicted from the suit premises. ' 1' In cross examinati?n she stated that she never applied to be a party in the joint ven1ure mission. She went on to state that the suit premise was built by her late mother and that all the flats are in one plot. When Re-examined by Mr. Marando learned counsel Pw2 9 _ stated that, the plot was acquired in · 19 56 and construction commenced in 1958. She clarified that she was occupying one flat and that her mother had a certificate of title in respect of the suit premises. In her view she was supposed to be consulted before the demolition was carried. Pw3 Miraz Mohd Suleiman is the neighbour of the plaintiffs in the suit premises and the 2nd plaintiff's son. In his evidence he s-tated that his father owns ,.,__ a shop since 1974 in the suit

premises owned by the first ~~ ........... defendant. According to him they were given notice to vacate in 2005 to pave way for re-9~velopment oner the two defendants_'_10. joint venture agreement. He is aware that his mother was observing I all the tenancy conditions including' paying ref1t. Pw3 went on to state that, the first-defendant has notofficially informed them about the alleged loint venture with the second defendant except that ' they were served with notice to quit and the first defendant stopped receiving rent an allegation that they have entered into a joint venture with the second defendant. It is further stated that the first 10 defendant never involved the plaintiffs to be parties 1n the joint venture. In cross examination Pw3 confirmed that, they are not opposing to the joint venture but they want to be Involved because .financially _th_ey are capable of entering into thi/)oint ·venture and since they have ~een ·tenants since, ·:197 4 they should have been given first . :; -1.1 priority. ~~' Pw4 Zainab Haji Omar Essack, is the second plaintiff in this case. In her testimony she testifie~ that she owns: a shop next to the 1st r plaintiff's shop since 19:74 in the suit prernises -9wned by the first.161 defendant. According • to Pw4 she has been payi1;1g I rent promptly up to the moment wh-en the·-first defendant refused to accept rent. She further apprissed the

court that she is capable of entering into a joint venture to redevelop the suit premises by joining forces with the first plaintiff. Her evidence marked the close of the plaintiffs' case .. I _, 1 11 t~~-------,------■-------·-------11------ - _ In the defence case Dwl Mathew Kabunga a Legal Officer from the first defendant testified to the effect that they were compelled · to issue notice to quit to the plaintiffs so that they re-develop the suit premises in the joint venture exercise with the second defe0dant. ,,, Upon being• showed Exhibit D l the notices served on t.he two .. plaintiffs, pw 1-- stated that, the allegations that the notice is void is not true and· --:~! that it was in accordance with the law, and even the plaintiff's ,~l,aim that they suffered damages is not true. It is Owl's further CQ"n'tention .......... ,, evidence that there was no condition in their agreement that the plaintiffs ~ere to be given the first priority in case_ W there was need to re-develop. the place. r ,, In cross examination Owl said he does not remerriber when the joint venture with the second defendant was executed. He identified a -lease agreement between .. the plaintiff and the first defendant dated, 1/3/2006. The said document was signed by the Manager and according to him when the lease agreement was entered the suit premises was in, a habitable conditions. Dwl further

narrated that the negotiations with second defendant for joint venture started 12 gpwpr l-4i!WieGW&iiiiWM i rt►WYIIDU.Uiiii& W m -*' lhiJ ,fl \. .. in the year 2004. He went on to confirm that when the first H defendant executed the lease agreement with the plaintiffs they had already executed the -·.agreem-ent for joint venture and that t_here was no termination ·clause in their lease agreement with the plaintiffs and he admitted that it was cin omission not to put such ,,. .. dc:i.use in the- lease agreement. In further cross examination Owl confirmed that they s.erved notice ' ..... ' to quit _."'9ecause the· building was old and required for re- development. He agreed .to the allegation that the application by 0 second defendant for j:oint venture which was made on 26/3/2004.}. I was accepted on 7/ 4/200-•4°, a week lciter. ·D_wl ··c.oncedes that at the -.. . time they accept~d the applicatiori of the sec~nd defendant, its company was n<?(in existence. He further concedes that entering a joint ve.nture with a company which does not exist is -fraudulent, and that they were dealing with an un existing company. Still while under cross examination he answered that the second defendant's company was not incorporated at the time when they entered into a joint venture agreement with the first defendant and that the 13 ' I statement that the said company had been doing business for

more than 10 years as alleged might not be true. In answering more questions which were posed Owl was of, the view .• • that the contents of the tenancy agree'ment had no option to allow tenants t~e._ right of first refusal, although ·in the . 1966 newspaper advert!:;ement they insisted that they encouraged sitt[ng tenants in ·\! the building to syndicate and apply for joint venture and they ' ..... assured fhat if they show up they will be given priority. It is Dw2 . ~~':. further argument that the particulars of the buildings for joint venture, were not mentioned in the qdvertisement and that the suit premise~O is not condemned. DW2 further .admitted that the co-owner in the suit premises was not consulted i'n the .agreeme nt for joint venture1 with the second defendant . ........ In re-e·xamination by Mr .. Shayo learned counsel, Owl applauded that, the suit premises is not fit for human habitation. It is further stated that the first plaintiff's application for joint venture was made - after second def,endant' s application had been granted. ., 14 According to Owl the joint venture policy has nothing to do with the . lease agreement and that . all the -tenancy agreements have to conform to the laws regarding Landlord and tenants. Dw2 Dennis Mtui is the Managing Director of the second defendant -- ' Company._ According to hin1 he read in the newspaper that the

first -~ defendant was looking for. people and private companies to enter . ,,,! -,: into joint venture to re-develop some of its houses the·suit premises being one of them. He then Dw2 applied for the joint venture with ·:,_:,::: ,"'- ,I .,,, the first defendant and his application was granted. He stated that 'i1··. 'f'.·. ·. " ·j ~ '/: the agreement was executed on l 0/5/2005 and in that agreement- ro the first defendant was to issue land and the ' second ! defendant was to incur all the costs for the re-development .. • I I This witness went to tell the court that it was agreed that when construction 'is complete the second defendant was to hold 75% shares and the remaining 25% shares will be for the first defendant. According him the agreement was to demolish the existing structure which was old and dilapidat(ng then they erect an eight storey 15 . building. Dw2 went on to state that the first defendant had to serve notices to quit to the sitting tenants in the suit premises so as to pave .. way for the redevelopment. It is Dw2's further evidence that despie existence of a court order issued by rugazia, J for the first plaintiff to vacate he defied order and resisted to vacate. Accordi(lg to him by that tin:7~ they had already fulfilled-necessary requirements with authorities' responsible ready to start construction and that they ' i! - incurred a lot of costs though he

does not remember the exact amoun("ow2 went on to state that since they were the first to app!y ,, for joint venture then they have the right of first priority and that their-io agreement was lawfully ente~ed. ' . In cross examination by . Mrs. Chihoma Dw2 ,stated that, in his application he specifically applied for the suit premises because he had inspected lt and was satisfied with the same. Dw2 further .. I 1· l admitted that the application for joint venture was made on 26/3/2004 while the second defendant's company was registered in .! ' ...• 16/6/2004 and that at the time they lodged their application the ~ :"It company was in existence but it was not yet registered. Dw2's went t. ' ' 16 • f ,;j i J ,'~l~·; 1 'i -~t~ ,.ri,n to confirm that the application for joint venture was granted by ~·· ., ... . l. ~e first defendant on 7/4/2004. According to him the documents to that the building was condemned was issued 1n 2008 and l. '' . ! } ~. ~ t ' '. 1 'Notices to quit to tenants were issue_d on 7/11/2006. ~ ,. · ·;At the dose -·of the defence. case, the !earned counsels agreed to I °\! < f,. ~< In his fina~-.St:ibmission, Mr. Shayo, learned counsel for the defendants ' ' . . '.starting with the first issue as to whether the notices to quit served on a. 1o the plaintiffs are illegal ·<:Jnd· unjustified stated_ that, the 5 reasons 1...biven by the plaintiffs in the amended

plaint t© back up their_ 10 .. >:t '.,J '.;. . • :-.allegation that the notices were wrongful are nof tenable neither in .. ( - f' fact nor in law. According to Mr. Shdyo,cthe-·plair:itiff had periodic I •• :leases as provided ~n_ section 79 (1} (a) of the Land Act Cap. 113 L • , .... which reads, "(1) where in an-y lease, 17 (a) the term is not specifically and no provision is made for the giving of notice to terminate the tenancy, the lease shall be deemed to be a periodic lease". ., Mr. Shayo fµrther cited section 79 (4) of tqe Land Act which provides for the_ l,ength of notice ·-which is sufficient to terminate a periodic lease. T8e learned counsel. further elaborated that the plaintiffs lease term ..., ... was monthly . and. they were paying rent monthly hence '.: : . · the leasff'·c;:ould be terminated by either party giving the other one { '°" ~ · month notice. According Jo f0r. Shayo, the law does not require the party t·erminating the lease; t(? give reasons.· Mr. Shayo went on to-/eJ • ,. • <> ,I,. ' ;it: state that, the six months' notice afforded to the' plaintiffs is ample (~,: // time to vacate and it did not bring' any disturbance or interrupti9n. It ~ :tf"'' is Mr. Shayo's further conte. ntio~-thaf, the law does not prescribe that ~f,l:- landlords. shall. compensate tenants for the loses suffered when their 1 ·~(tenancies· is -la~fully-brought to an end·. ,

• ,t' ' ~1 1 :.:i.-;.l illl ' .:l !: tt..•,.. J-11r. Shayo went on .to argue t~at, there is no law which requires ; ··"lll ,,.. : -~ ' :randlords to receive r:ent because to the landlord rent is right and not .';.:.~ ..... ~ .. .,.,: - 18 . '1 . • 1 • ~ . 't· . !. _ liability. It is therefore stated that after giving notices in order to pave way for redevelopment it would have been wrong if the first defendant had continued to ask and receive rent from t~nants. ·· Citing with authority Land Case No. 160, 2006, J.M. Ramji and 5 other:s versus National Housing Corporation (unreported) by Rugazia, ' . . . ::·, J following .a: previous decision by the late Mapigano, J in T.S. /nternatio_[lal Ltd and 2 others VS. M/S Jubilee Development Ltd and another Civil Case No. 53 of. 1996 HC DSM (unreported) where it was r1 .. 1 held that;::::::::~ II "There is no laws so far in our statute books which gives sitting_ 10 J ' i I tenants the so called right of fitst refusal in joint! venture projects . • I I think the landlord has a final say in such arrar'1gements .... " ' ... Mr. Shayo invit. ed . this court to follow the above principle and hold ... that the plaintiffs abide to the notices and should forthwith vacate .: I the premises to enable th~ redevelopment to take place. 19 r9*ih-----------------------~-------- {~ 't ~- :i ( I i i : ) I .,' . On the second issue, Mr. Shayo submitted

that since the plaintiffs 1 r: ) '! t have no pre-emptive rights or right of first refusal to carry the joint ·• J venture it follows that the first and second defe.ndants were right to I. ;_ enter into a joint venture agreeme.nt. Further to that it is alleged that f • I ' I ' ' '· " the plaintiffs. have . no locus to question the . legality or otherwise of ~ :J • ' '., the joint v~nture agreement because they are not privies to it. Mr. r •i' - - Shayo further ·contended that at the date of the Agreement the firsi· ,~' fi • ~ <J f ~ _,,,.i ~ ' ~ J "ii ,: ~ I ,11> . t and second defendants had capacity to contract. I ·-f f' ~· .] '"t ·''i· :., f~ ..... ~. ,_: ; ' ............ ·: 1J : .~ ) •., :. I ' ~,; : i (' ' ·~ Regarding issue No. 3 Mr. Shayo stated that, the plaintiffs are not p.J :, r t ~', 1 ''• fl ., entitled to compensation _because the defendants did not infringe- co I ~. ( 1 ·i ·. -:tr~ any. of their rights, and that the plaintiffs have not ·proved any loss or !}. irt I ,~~ lr:1 damage which they suffered as a result of the notices. I .} jij ~ '• 1ffi ·r,-: I 1t• i-::. :r; ' i ><,,,/\ As for the fourth issue it is asserted that, the redevelopment project . .. '" :~ , -.·r t·· was de·layed by the -plaintiff's refusal to vacate the premises within ; t•~, ;~( "I , •' 'I ·1::t ! ' ·~ the period given in the notices to quit. According to Mr. Shayo. the holding over of the

p~emises without paying rent caused substantial . 20 /£--r-,.._ --··0()y . . losses to the defendants and. prevented them from commencing construction. On the common issue of reliefs Mr. Shayo submitted that the plaintiffs be ordered to give vacant possession· of the suit premis~'s to give ·-· way for redevelopment of the plot. He also prays that the defendants be awarded interest on the damages of Tshs. 500,000,000/= and on the mesne profits of the rate of 25% from 2005 to the ddte of judgment and interest on the judgment debt at the ,....._ ' rate of 12% p.a from the dcite of judgment until payment in full. In their joint written subm.iss·ions the learned couns,els for the plaintiffs-If:· Mr. Marando learned counsel and Mrs. Chihorr1ra learned counsel submitted by arguing all the five issuesJnseriatim. On the first issue the learned counsel argued that, there was no written lease agreement between the parties as the lease that was purportedly issued to the plaintiffs never became effective due to want of proper signqtures, stam.ping and registration. According to 21 ~1.,,'·, . •·-·----llf:l!l!-------·•-•am . e ,, I& •-••·- ■ am+m■mw,.wmanwna;Utmraam . . .w•• _, ___ . _• _,_==-•••ll!llllana _) . them, if the two year lease agreement which is filed in the record I ' ., was to be relied on, the position is that it is for a period of two years .,{ I st from 1 March,

2006 to 28th February, 2008. Citing paragraph 5 ( c) of the said lease agreement, the learned counsels · stated the . . . I grounds of terminating the said lease to be failure to. pc;i'y rent, or . i' when renf falls in arrears· .for one mo:~th or failure to comply with covenants without notice. · It is further applauded -that the first -~ . plaintiff had been lawful/y·paying rent and abiding to the covenants therein specified as agreed in the lea$e agreement. The learned counsels went on to narrate that the reasons disclosed-IP I l 1 ! for the termination of the '!ease are not good and sufficient in law. I I They further argu~d that the joint venture -policy requires the -firstdefendant to advertise, in the media and or encourage the ' ', sitting tenants ~to syndicate and redevelop the plots, but this was never done iA respect of the issue at hand. It is further contended that the property was in good habitable condition further to that, being a sitting tenant for more than 25 years and capable· of I redeveloping the sam,e the first plaintiff could do the redevelopment · 22 _that was intended to be done by the second defendant. Citing with authority the case of HR (1978) .Liry,ifed & 8 others vs. National Housing Corporation. Land Case No. 185 of 2005 (unreported), the learned counsels insisted that the notices were based on _'a process that lacked transparency and· did

no(tollow procedurE? ~~nee they dre unlawful. . ·,. Mr. Marando and Mrs. Chihoma further submitted that·the Land Act, Cap. 113' under secti~n 88 (1) (a) provides-·for a requirement that the ~~ tenant'sh,al! have peaceful and quiet enjoyment in the suit premises. Io According to the learned counsels when disturbing pea~e and quiet enjoyment of a tenant you ought to assign good ,reasons. Page 139 of the books conveyancing, principles and pracffce by Tom Qjienda and Cheshire and Burn 's.- Modern Law of Real Property at page 387 were cited to,cement the above contention. In the earlier book it is stated that; , , 23 "Covenants must be distinguished from uconditions" on a tenant. If a tenant breaks a condition in the lease the landlord will have an automatic right." · nd · On the 2 issue Mr. Marando and Mrs. Chihoma contended that, the joint·. venture agreement was wrongful as the same was fraudulently --~·e concluded because the contents of the application letter were meant to induce the first defendant into forming a joint venture,,_ .._"::Iii._:agreement with. them. The contract entered therefore is according to them wrongful, null and void. The I.earned counsels went on to cite the case of:Anna Cochi an·d another v~rsus Sergion-(() Stabile, commercial case No. 30 of 2001,. High Court, Commercial I • I Division, Dar es Salaam{unreported) to show the ingredients of fraud and

stating that _t~is joint ve_nture contract is:an advantage obtained by fraud. The· ... 1earned counsels cited the case of lazarus Estates ... Limited_ versus --Beasley [1956]. All E 342 at pgg~ ;34_5 where Lord Denning held that; 24 uNo court in this land .will allow a person to keep an advantage :~~ ;, ,, [· l -:' f ;_ I which he has obtained by fraud~ No judgment of a court, no I , !: I,. :; \: order of a Minister, can be allowed to stand if it has been obtained by fraud. fraud unravels everything once (f~~ud) is '' proved, it vitiates judgments, cont,acts, and all transactions whats.oever," to bring ,the term to the end, whilst the landlord do_es not automatically have such a right for breach of a covenant". And in the later it is stated that; 1 'JA covenant that. the lease shall have quiet enjoyment fa_ © implied in evf;!ry lease _that does not expre'ssly deal with the matter. The -meaning of this is that the /esee shall be put into possessio,ns and that he shall be entitled to damages if his enjoyment is substantialy disturbed by · the acts of the Iessor ....•. " . 25 ,, ,; -· C . ' -~... _As for the third issue the counsels for the plaintiffs stated that the plaintiffs have suffered a· lot in the hands of the Defendants, including unlawful termination, threats of being evicted etc. According to them all these entitle_s· the plaintiffs to recover damage from defendants at

the courts discretion. ~- ·-. ; ' 1 Regardi~g issue No. 4 it is submitted that, since the notices to quit f ' were unlawful and the Joint venture agreement null and void, it f:. follows th__~"'i~even the intended project is unlawful hence no loss on ;f.1! _"';., ·• ' . . ;~ ' I :v. part of the defendants. :f' ' }~ P~ i ,:·,, . ~ . . ~ :. • I I r: On the last issue the learned counsels prays for a t:leclaratory order -<o ,I :~ : ,.f. that the notices terminating the contract ·are-·n\JII and void, an order f-· that the joint, venture agreement between the defendants be ,,l cancelled and the FIRST defendant continue to recognize the I••\ (: plaintiffs as lawful tenants and receive rent without interest on the I, ,h I~ , :i; arrears, they finally prays for costs of the suit and damages on courts ti• . ~ • discretion. 27 .. 'H! ' ,~r After having gone through the pleadings, hearing the testimonies of all witness from both sides and having gone through the final submissions of counsels for both parties and the entire record of this case I will now start by determining the four issues which were raised in this case in seriatim. The first issue is whether the _.notices to quit served onto the pl-aintiffs ~ T ,.,,_ I ,' .: ~~' .,._,-.._ ~' are rlleg_QI~ and unjustified as alleged. It is not disputed that the lease -R11'f '. agreement between the plaintiffs and the first defendant which

was issued to the plaintiff's in 2006 was not effectively executed due to -. . ', ~ ~ :~~ Ir' J !( ;• want of proper signatures, ·stamping and registration. The leaseJo ! ' " ~!~; ~: i . " j " -· ,- "'"j ' - agreement between the parties the;efore remai~ed oral. ,, Section l 03 (i} of the Land Act Cap 113 RE 2002 as amended by Act ,f t, li - . 'I •,. ' ,I C !' No. 11 of 2005 provides for reasons/causes upon which a lease may ' 1 ,, 11 · ,, be terminated by the Land Lord, it provides interalia that; 28 "103 - (1) subject to the notice served under Sections 104 and 105 of this Act, a lessor may exercise any right to terminate a lease for failure to pay rent due ·under the lease or for breach of any covenant or condition in the lease" ,' ,/ i ' It is trite law that neither party can terminate a· lease without a cause. A lease is a binding contract giving both -land lord and a ·,~ ~ 2} tenant certain rights for a fixed period of time. A lease protects the ,.,, land lorq.,J?Y guaranteeing that the rent wilr be paid during the lease period. If a tenant breaks the agreement by not paying the rent, damaging property or in any. other material· way, the land lord ma')Lfe terminate the tenancy for cause and the tenant. must have violated I I a term in the written agreement. · 1. ( I, i In the instant casJ I am afraid the termination of the plaintiff's tenancy does not fall under th~

prgyisi9ns of Section l 03 ( 1) of the Land Act Cap 113 RE 2002 os amended by Act No. 11 of 2005. In h_is testimony DWl one Mathew Kabunga a Legal Officer from the first defendant testified !hat, they were compelled _to issue notice to quit 29 q-- to the plaintiffs so that they develop the suit premises-in joint venture exercise with the second defendant, I don't think if this reason was sufficient to terminate the tenancy for the following reasons; the ' plaintiffs have been tenants for a long time (more than 25. years) observing qll . the tenancy requiremeQts including paying rent promptly and keeping the premises in good condition and they have nef,ier breached any lease covenant. Further to that the plaintiffs .are , ..._ in good financial position capable of entering .into the said joint v--..e'nture agreement with the first defendant. In my view .if you hove a )e.ase agreement nor.molly n-otice cannot- ~0 . be given to yo1..J unless you are in. breach or there: ore other material I I reasons for the same. The land lord/tenant relationship is founded on duties prescribed by statutory law, the com"n1°qn ·!'av/or the individual lease. What f?.rovisions may be contained in a lease is normally· . regulated by statutory law.'.l?Jasic to -Oll"Teases is the implied covenant of quiet enjoyment which ensures the tenant that his possession will not be .disturbed by someone with a

superior legal title including the ; land lord. By giving the plaintiffs notices to quit in the instant case is a .' • . 1 30 ,·_:_r:_i •, .,· __ ·l:-:_i : .: ·-~-~ -_ .. -·; .-;···- . breach of the said implied covenant. The same position has been outlined in the book of Cheshire and Burn' s Mord ens Law of Real property at page 387 where it is stated that. ' ''A covenant that the lessee shall have quiet, enjoyment is implied in every (eqse that does not expressly deal with the ma~ter. The mebning of this is that the lessee shall be put into possessions ~~ ' . , ..... and that he shall be entitled to damages if his enjoyment is ,..._ substantially disturbed by the acts of the lessor" . ...... ~ ' In challenging the said notic~s the plaintiffs claimed that they were entitled to the right of firstrefusal. Our law is silent on the right of first_ lil refusal, however there are conflicting decisions b'yr this court. In the case of T. S. INTERNATIONAL LIMITED and Others versus M/S Jubilee Development Limited and the National Housing Corporation (unreported) Mapigano, J. (as he then was) had this to say; 31 "The proposition that a tenant is legally entitled to a right of first refusal in a sale of premises he occupies is so startling that I am surpri.sed that it has been made: As I understand the law, no such right exists". Confirming the above position, Rugazia, J. in his ruling in

respect of . _, .. · ' . an application made in respect of consolidated two .cases (Land Case No. l 01 of 2005 (cf) Land Case No. 90 of 2007 stated that; there cannot be any rational basis upon which 11 ... to force a land lord into such an arrangement". Justice Longway in her decisions differs with the- c;:ibove positions. 1rJ.{J the cases of Kamal Jaffer V. National Housin·gr Corporation_ and Shehenshah Tower Limited,-_Land Case No. 36 of ~006 (unreported} and HR (1978) Limited & Others Versus National Housing Corp.oration ,, Land Case No. 185 of 2005 .(unreported) Longway, J (as she then -r was) found the joint. venture agreements entered between the l •l plaintiffs and the defendants to be null and void for lack of I l transparency and t~at the whole process was unlawful. Basing on I 1. . .J 32 ~ r ~ ~ . ! ' I the National Housing Corporation Joint Venture Policy the learned Judge stated that, "the plaintiffs in. the above cited cases ought to have been . given right of first refusal to redevelop the suit premises . because they ore long sitting· tenants with good financial positions capable of redeveloping the suit premlses". As I sf6ted earlier that the right of first refusal is _a new creature in our law in a- sense that we don '.t ·have it in our Jurisdiction. The Right of First refus'al is therefore a "common law" principle which gives sitting '"' tenants pre-emptive

rights -when the land lord/owner wishes to enter a joint venture or sell th·e ·property to offer first priority to the sittingJV tenants before giving- a chance to any other person. Now in I / ri ;: , I '! •I ~ , ! l~ Tanzania jurisdiction, since -the ldw is silent on this principle we can 1 /, . ·rf ,.-.l • 11 '; .l 1-. .. , , ' ,ljl 't:, < go to common· l~w depending on circumstances of the case. In . t' > . J( !. :11 :·.i j; other words, ~ight of firs-t. -Refusal is not an automatic right. However .\ .'fj ,. w • •~ ;,~ ",•I the Right of first Refusal can be invoked when there are exceptional . ii! ·,·· ,i " I;"-~ ,1 l :!i (', ~". ~-: circumstances including situations where a tenant; · .. ; {a) Is not iri default under the lease. ,, ' 1· r I· ; 33 I , I " '# ,. 1 ';.' ·(b) Hos · not assigned his lease or sublet oil or part of the premises. (c) Is not holding over in the premises. (d} Hos been keeping the premises in. good condition. and repa~r.. (e) Is finaricio1/y capable to redevelop or buy the suit premises. (f) <E'.Haslegol capacity to enter into contract. In the instant case the first plaintiff qualifies to all the conditions necessary for being · granted the right of first refusal because the- record arid the testimonie~. qpduced before this court shows that the-t@ . . . plaintiffs have been observing the lease covenonts, paytn.g rent • /I promptly, keeping -the

buHding/premises in g.ood COr,i1;¢tit~· ,e:,nd repok. further. t,o that the first plaintiff is a lirrHted "liab'.Hity comp©Ay therefore capable .... to enter into contract as opposed't-6 the second ~ defendant's ·company·-which-was not incorpor.ate_d ~DLthe_ .tir:ne of signing the joint venture agreem•ent. The firs-t defendant was supposed to act m9re diligently to ensure that it enters into a contract with a company which exists under our laws. The· first 34 I • ' i . plaintiff 1s also financially capable · to enter into a joint venture agreement with the first defendant. ., Further to that the National Housing Corporation Joint Venture Policy ' specifies that the first defendant encourages sitting tenants to syndicate i.tJ .case they want to enter into joint venture. Paragraph 2.1 of the said Joint Venture Policy provides that;. :. --1~! . -e-1. ' 2.1 NHC regularly advertises through the mass media cal!ing 1 ...... ~"""... , for partner and/or encourages sitting tenants to syndicate and redevelop respective plqts jointly with the corporation". . I Having said all that., it is undoubte'd that the first ·isrsue is answered in_ JO · the affirmative. As for issue No. 2 as to whether the joint venture agreement between first and second defendants to redevelop Plot No. 22/31 is wrongful as alleged. In , his testimony . DWl one Mathew ' Kabunga the Legal officer from the first

defendant, testified that the negotiations 35 -£1-s- with the second defendant for joint venture started in year 2004 and that the said joint venture was execufed in 2005. OW l further testified that when they executed the lease agreement with the plaintiff they had already executed the agreement for joint venture, he went on ',)' ·• •:,i to state thaf the firs1 application for joint venture by the second ' ' IJ ·! ,I defendant was made on 26/03/2004 and the said application 'NOS 'i :' t I accepte·d on 07/04/2004. j Again DW2 in his testimony confirmed DWl''s testimony that the ..,; , second detendant ,, applied for joint venture in 26/03/2004 and it was approved on 07/04/2004. DW2 further testified that the second- 10 Defendonts Company was incQrporoted in 26 June 2004, thot means :. at the time the first defendant . entered into. Ia joint venture '•:,'I ·' /: . ' ··~agreement v1ith the first defendant, the seco'nd defendant's 't ( "l company \vas not· incorporated hence it was not legally in ' ,,t existence.- The question which rightly clicks my mind is how could a :J t pe;blic corporation like the firsi defendant enter into a joint venture ~: agreement with a company that is not legally in existence? Does it_ ,;.11: ~ ·~_-mean ·!"here vvas no search n1ade by the first defendant to satisfy ~ . .respect I arr, moved to say that this whole process was not only improper but also

fraudulent and this is confirmed by OW 1 in cross examination by Mr. Marando when he said that; "it is true that when . you enter into joint venture agreement with a company that does '' not exist then that is fraud." Moreover PWl in his testimony stated that before they were served with notice to quit the first plaintiff applied for a-joint venture in the re..,de_velopfl~ent of the suit premises but were- told that the first defendants had already executed an agreement with another person -for joint venture and·. that if they were interested tney will - tu have to secure another plot. This was just not .fair for,the tenants who had been good tenants in the· suit premises· since year 1977, observing tenancy. condit'ions, paying rent promptly, built their business name. tr1 the suit premises and who are financially capable ' of redeveloping the suit premises as opposed to an unincorporated company or unexistent company. Further to that the plaintiffs have themselves shown interest to enter in joint venture agreement with the .first defendant in qrder to redevelop the suit premises. I thers~;::;:-t 37 .join hands with my learned sister Longway, J (as she then was) in her decisions in the cases cited above i..e. Kamal Jaffer Vs. National Housing Corporation and Shehesha Tower Limited and that of HR (1978) LTD (Supra) where the joint ventures entered were found to be null and void

for lack of transparency and the whole process was declared prll.awful. Again· the second issue is answered in the ' affirmatJy_e. ~·t ---~- On the tr}i[~ issue whether the plaintiffs are entitled to compensation and damages for any wrong suffered; notwithstanding the fact that '. .L. issue number one have been ..answered in the affirmative, it is- cleaL 10 on record and the testimonies of witnesses ·that the plaintiffs have • I been in physical occupation of -th~· suit premises aWalong, and have ,. not proven the exfe-nt to which their---cbtJs-iAess-es--AEFve-cbeen affected, i' I am afraid they will not be entitled to neither compensation nor I: i damages. The third issue is therefore answered in the negative. As for issue number 4 whether the defendants are entitled to vacant possession and damages from the plaintiffs, having found ·the· 38 : 11 ·'. : -~··'; 1 ';' t--·, : •. .f.'_\ "'· ! I .·I ,1· !• . notices to quit served upon the plaintiff's to be null and void, the joint venture and the whole process.unlawful, it follows therefore that the defendants are entitled to neither vacant possession nor damages. The wise assessors Mr. Morris and Mrs. Bukuku in their opinions found that th~e notices served upon the plaintiffs and the .joint venture • ;1 ·i' -~ agreement to be lawful. They therefore opine<;l that :the plaintiffs' _.,,_ case be dismissed. With respect I differ with

them for the reasons stated herein above. As for the reliefs that the p~rties ar.e entitled to since issues number l ,,_{~ I and 2, have been answered in the affirmative· vt follows the~efore ~ that, the notices t9 quit serYed-=-LJpQr;:i--A-8~~pl_g_intLffs are null and void, th~_jQ_iQ_t ~entt1:re and the whole process is unlawful the cons~quence ~ . . -·· . . -· ... , of which renders the same null and void abinitio. -Under the circumstances therefore the plaintiffs will remain to be lawful tenants of the first defendant in the_ su'it premises and the first defendant should recognize the!)! as such and I so order the plaintiff's to pay all I ' 39 ., ~ the rent arrears and continues to pay monthly rent to the landlord as required. I say so because there is no evidence to the effect that the suit premises had ever been condemned as dilapidated and/or unfit for human settlement. If the first defendant feels that the building is condemned it should declare so an-d advertises afresh for joint :~· venture following the required procedures. Also if the plaintiffs and the ser:ond. defendant wish to enter in such agreement they can ~ .,. ~ reapply for the same and proper procedure be followed. ·--""'- ... Now what is the fate of the counterclaim? The answer is found in · issue number four above. As I stated earlier th.at the notices to quitJ; served upon the plaintiffs. ci're null and

void, the joint venture and the whole proce~s unlawful, it follows that' the counterclaim fails becawse · the defendants are entitled to neither vac;gnt. possE3ss1on nor / damages. ' Having said all that, l find the plaint to be successful to the extent that all the issues save for issue number three and four have been answered in the affirmative. With regard to damages, as I stated in ,•,. 40 . . extent to which their businesses have· been affected they vyill not be entitled to damages. . The suit is therefore . allowed ' with costs. , . . Right of App~al Explained.

JUDGE - 25/6/2013 , l 25/6/2013 10 2nd Plaintiff ...' } Mrs. Chihoma for For 1st defendan"t 2nd defendant } Mr. Shayo assisted by M/S Ndigwako. - ·. =_;.)~ ~ l CC. Possy 41 /,~fl l •?,'-:-'<.~~ r' i .· ..·:'\). .. ., I I \,4//\ '"., ,· ., , \\ !)Assessors: . - l. Mrs. Bukuku \ ; t j \/ '2. Mr. Morris· Court: Judgment delivered. R. E. S: MZIRAY JUDGE·· ,., 25/06/2013 ( 42 \ .