TOYOTA T LTD VS TANGA HARDWARE AUTOPARTS COMM APPEAL NO

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) (APPELLATE JURISDICTION) AT PAR ES SALAAM COMMERCIAL APPEAL NO. 6 OF 2014 (Appeal From the District Court of Tanga in Civil Case No. 30 of 2010) TOYOTA TANZANIA LIM IT E D ........................................APPELANT VERSUS TANGA HARDWARE AND AUTOPARTS 2006 L T D ......... RESPONDENT 3rd August & 10th September, 2015 JUDGMENT MWAMBEGELE, J .: This is an appeal from the District Court of Tanga in which the respondent; Tanga Hardware and Autoparts 2006 Ltd successfully sued the appellant; Toyota Tanzania Limited for, inter alia, recovery of the sum of Tshs. 37,640,234=. The District Court ordered the appellant to pay the respondent the said sum of Tshs. 37,640,234/= and interest of 34% per annum from the date the debt accrued, 34% per annum from the date of filing of the suit to the date of judgment, 7% interest per annum at court's rate on the decretal 1 amount from the date of judgment to the final satisfaction and costs of the suit. Aggrieved, the appellant has proffered an appeal in this court on the following grounds of complaint: 1. Upon finding that he expected to see the Branch Manager who made verbal orders of the disputed goods, the trial Magistrate erred in law and fact in holding that the evidence of PW1 and PW2 was sufficient to show that the appellant had ordered the said goods; 2. The learned trial Magistrate erred in law and fact in holding that the appellant was indebted to the Respondent without any evidence of the goods being ordered; 3. The trial Magistrate erred in law and in fact in holding that the appellant was indebted to the respondent without any evidence that delivery notes were received by the Appellant; and 4. The learned trial Magistrate erred in law in awarding exorbitant interest on the outstanding amount without any basis It was agreed by the parties to this appeal which agreement was blessed by the court that the appeal be disposed of by way of written submissions. The submissions schedule was fixed by the court with which the parties complied. In this appeal, the appellant was advocated for by a law firm going by the name of IMMMA Advocates while the respondent had the noble services of Mr. Michael Luguru, learned counsel. 2 On the first ground of appeal, the appellant, in support of the appeal, submits that the trial magistrate having found that he expected to see the Branch Manager who made the verbal orders of the disputed goods, he erred in law and fact in holding that the evidence of Semi Sherembi PW1 and Bharat Bangwanji Laxman PW2 was sufficient to show that the appellant had ordered the goods in dispute. The appellant submits further that the trial magistrate was wrong to disregard the evidence of Kaushal Sachania DW1 and Adam Yusuph DW2 who testified to have not been aware of the said verbal orders. On the other hand, the respondent submits that there was sufficient proof from the two plaintiff witnesses that the parties entered in oral agreements on the supply of some of the items. The learned counsel for the respondent submits that the provisions of section 10 of the Law of Contract Act, Cap. 345 of the Revised Edition, 2002 recognize oral agreements between parties. It is submitted further that since the oral agreements were supported by Tax Invoices and Delivery Notes and upon receipt of the same; that is, the Tax Invoices and Delivery Notes, and that the appellant did not deny receipt of the items, there was therefore a binding contract between the parties. The second and third grounds have been consolidated by both parties in their written arguments but, really, the arguments are similar to those fronted in the first ground of appeal. The appellant argues that the trial magistrate erred in holding that the appellant was indebted to the respondent while there was no proof that the delivery notes were received by the appellant. To counter this argument, the respondent submits that there is no evidence to prove that the goods were not received by the appellant. 3 The complaint in the fourth and last ground of appeal is in respect of the interest at bank's rate which the respondent was granted. The respondent, as alluded to at the beginning of this judgment, was granted interest at the rate of 34% per annum from the date the debt accrued to the date of filing the suit and the same 34% interest per annum from the date of filing the suit to the date of judgment. It is submitted by the appellant that at the time, the rate of interest at the time ranged from 12% to 21% per annum. On this ground, the respondent counters that the trial magistrate was correct in awarding the interest of 34% per annum in that at the time the bank interest rates ranged between 34% and 35% per annum. I have gone through the proceedings of this suit at the trial in the light of the complaints in the grounds of appeal as well as the written submissions by both learned counsel for the parties. In disposing of this appeal, I will consolidate the arguments in respect of the first three grounds as they seem to be intertwined. The respondent at the trial fielded two witnesses in support of its case and the appellant, like the plaintiff, fielded two in defence. The Tax Invoices and Delivery Notes were tendered in evidence by PW1, received and marked Exh. PE A collectively. PW1 is an auditor who audited the accounts of the plaintiff. There is no iota of documentary evidence to counter that the goods alleged to have been supplied to the appellant were not actually supplied. I am not in agreement with the appellant that by the trial magistrate stating that he expected the Branch Manager of the appellant company to testify that he did not make the oral orders amounted to shifting the buck on the 4 appellant. The principle embodied in the provisions of section 110 of the Evidence Act, Cap. 6 of the Revised Edition, 2002, as correctly put by the appellant, is that he who alleges must prove. I think the respondent, in the circumstances of this case, sufficiently discharged this burden. In the circumstances of this case, it was not reasonably expected that the respondent would have called his opponent; the Branch Manager of the defendant company, to testify in support of his (the respondent's) case that he indeed did or did not order orally some of the items complained of. If anything, it was the appellant who was supposed to produce the Branch Manager to counter the allegation. The Branch Manager of the appellant company was a very material witness for the defence at the trial. In the absence of any explanation from the appellant, let alone a plausible explanation, why the Branch Manager was not brought to testify in defence of the case, the court is, like was the case in the present case, entitled to make an adverse inference against the defence at the trial. I find fortification in this stance in the case of Hemedi Saidi ks Mohamedi Mbilu [1984] TLR 113 in which (quoting from the headnote) it was held: "where, for undisclosed reasons, a party fails to call a material witness on his side, the court is entitled to draw an inference that if the witnesses were called they would have given evidence contrary to the party's interests." In the case at hand, the claim was purely contractual and as per best business practice, proof or otherwise of the claim was highly predicated upon documentary evidence which documentary evidence was tendered by the 5 plaintiff (the respondent herein) and admitted in evidence. The appellant tendered none. Neither did the appellant call the Branch Manager who was its star witness to testify in defence of the suit. That is perhaps the reason why the trial magistrate expressed his disappointment of not having had an opportunity to hear the said Branch Manager, a fact which certainly left him with no option but to believe the story told by the plaintiff's witnesses supported by the documents tendered. In the premises, I am satisfied that the respondent, on the preponderance of probabilities, proved the allegation that he indeed supplied the goods to the appellant some of which were based on oral agreements. The appellant did not adduce sufficient evidence to deny that fact. In the premises, I find and hold that, on a balance of probabilities, the respondent proved that it supplied to the appellant the goods listed in Exh. PE A collectively and that the appellant owed the respondent the sum of Tshs. Tshs. 37,640,234/= as claimed in the plaint. I would therefore dismiss the first three grounds of complaint for the reason that they are wanting in merit. The last complaint is in respect of the bank interest. The appellant argues that the bank interest rate at the time was between 12% to 21% per annum. The respondent, in contrast, argues that it was between 34% and 35% per annum. None of them brought evidence at the trial to substantiate the percentage which reigned the day. Indeed there is no material basis for the award of the said commercial interest rate. The plaintiff did not bother to state what the lending rate was then, apart from mere statement by PW2 that "the bank rate was quite high while having the overdraft". 6 The Bank of Tanzania, Monthly Economic Review of June, 2010 (available at http://www.bot-tz.org/publications/MonthlyEconomicReviews/MER Jun 2010.pdf) and some relevant statistics produced by the International Monetary Fund called "International Financial Statistics and data files" (available at http://www.indexmundi.com/facts/tanzania/lending-interest-rate) show that at or around the time when the cause of action arose; that is the year 2009, the lending interest rate was 15.39% per annum. These are details which, being literatures produced by the Bank of Tanzania and the International Monetary Fund which are reliable entities dealing with finances in Tanzania and the world respectively, a court can take judicial notice of under the provisions of section 59 (2) of the Evidence Act, Cap. 6 of the Revised Edition, 2002. This being the case, it seems to me, the bank interest rate awarded to the respondent was indeed on the high side. It seems to me that the bank interest at the rate of 15.39% per annum in both instances; that is, from the dates the respective debts accrued to the filing of the suit and from the date of filing of the suit to the date of judgment would have been apposite in the circumstances of this case. I therefore vary the bank interest awarded by the trial court from 34% to 15.39% per annum in both instances. The sum total of the foregoing discussion is that, save for the rate of bank interest awarded to the respondent, I find no merit in the appeal and proceed to uphold the decision of the trial court. In the upshot, save for the last ground of complaint in the memorandum of appeal in which the rate of interest has been varied from 34% to 15.39% per 7 annum in both instances, this appeal fails and is hereby dismissed in its entirety with costs. Order accordingly. DATED at DAR ES SALAAM this 10th day of September, 2015. J. C. M. MWAMBEGELE JUDGE 8