199508033 TZCA Dar es Salaam

·• IN THE COURT OF APPEAL OF TANZANIA A'r• ARUSHA (CORAM: NYALALI 9 C.J. 9 )V1AKA1'v1E 2 J.A. 9 And KISANGA 2 J.A.) CIVIL APPEAL NOo 40 OF 1993 ZAKARIA BARIE BURA 0•000000001.00• APPELLANT vs THERESIA MARIA JOHN MUBIRU RESPONDENT (Appeal from the decision of the High Court of Tanzania at Arusha) (Munuo 9 J.) dated the 28th de.y of August 1992 in High Court Civil Case Noo 66 of 1992 JUDGEMENT O:E' THE COURT NYALALI 9 C.J o: This is an appeal by one ZJu{ARIA BARIE BURA 9 hereinafter ca1led 9 the appellant 9 against the judgel.Oi~nt and decree of Jthe High Court at Arus\a where the respondent, n.,tmelf Tl!rSIA ll'lifilA JO~ IIOJlIRlJ, had su·ccessfully instituted a suit against the appellant. In that suit 9 the \~espondent sought a declaration to \ the effect -i\at the sale of the house on Plot No. 64 \ ' Block 21 Kaloleni in Arusha municipality between the appellant and respondent's late husband 9 nam.ely 9 JOHN LEZON Tu1UBIRU is null and void. She also sought vacant possession of the suit premises ai.~d costs of the suit. The appella..~t on his side counter-claimed without success for da·mages on the ground of trespass by the respondent and in the alteinative 9 a refund qf the . . '. 2 ... purchase price of the suit premiseso Aggrieved by the decision of the High Court 9 IvJ:UnU09 J. 9 he appeals to this Court. He is represented by i1r. Sang 1 ka 9 learned advocate 9 whereas Niiss Bigeye 9 learned ,• counsel from the Tanzania Legal Corporation 9 represents the respondent. Seven grounds of appeal have been submitted in support of the appealo It is coDlillon ground between the parties to this case that the respondent was the wife of one JOHN LEZON 1\/IUBIRU who died in September 1986. Further.more 9 it is common ground that sometime before that death 1 the married couple had agreed to jointly acquire a plot of land and build a matrimonial house thereon. Towards that end the couple applied for a Right of Occupancy in respect of Plot No. 64 Block '21 1 9 KALOLENI 9 in Arusha municipality. In response to the application 1 the couple were jointly given a.D offer of Right of Occupancy for a term of 33 years under a letter Ref. No. ARD/1420/7/FAK dated 13th May 1977 from the Land Development Department in Arusha Area Commissioner'§ Office. That Offer was produced at the trial as exhibit P. 2. Fu.rtherrriore 9 · the couple jointly paid various fees in satisfaction of the conditions stipulated in the off3r of Right of Occupancy and were issued with receipts acknowledging such payments as shown in exhibit P.J. It is also common ground that the house on Plot No. 64 Block 1 21 1 KALOLENI 1 was built _through a loan given by the National Housing Bank on security of a 3 mortgage of the title to the Right of Occupancy. That mortgage was contained in a mortgage deed produced at the trial as exhibit P.L't• Furtherm.ore 9 it is common ground that subsequently 9 respondent's husband entered into a written a:3:reement to sell the suit premises to the appellant. The agreement was dated 27th June 1984 and was in two documents produced at the trial as exhibits P.8 and D.1 for the respondent and appellant respectively. Both docw:aents read the saw.e except tha;l:i the purchase price reads as shs. 500 9 000/= i.n exhibit P.8, whereas it reads as shs •. 900 9 000/= in exhibit D.1. There is also an add.endu.r...1 in exhibit D.1 pennitting the vendor to continue in occupation of the suit premises for a - prescribed period. The respondent's case is that the agreement between the appellant and res_pondent I s late husband was fraudulently D.ac1e for the purpose of d.eprivi-ng the respondent of' her rights in the suit premises. It is part of the resrJondent 1 s case that in furtherance of that fraud 9 respondent's husband fraudulently obtained a title deed, produced at the trial as exhibit D.3, I . purportedly issued in the sole nmae of respondent I s husband 9 instead of the joint names of the respondent and_ her late hwiband. It is part of respondent I s case that the ap:9ellant was either a party to or knew the :fraud. Further.more 9 it is respondent I s contention t-hat the appellant is entitled 7 if at all 7 to a refund of only the purchase price of shs. 500 9 000/= shown 4 in exhibit p.,.3 1 which was deposited in court by respondent on receipt No. ERV No., 654854 dated 29-7-88. The appellant I s case on the other ba...YJ.d is that the \· arrangement be·cween the respondent and her late husband to jointly acq_uire and build a matrimonial house collapsed as a result of matrimonial problems between the couple 9 ru1d thereafter respondent's late husband proceeded alone to acq_uire the plot of land aad alone built the house in q_uestiono It is appellant's contention that no fraud was committed either in obtaining the title deed or the saJ-e of the suit premises. It is part of appellaii.t' s case that he is entitled to vacant possession of the suit premises 9 . or in the alternative 1 to a refund of the purchase price of shs., 900 1 000/=.plus interest 1 and not the lower sum of shss 500 9 000/= 9 which was shown in exhibit P.8 only for the purpose of enabling respondent•s husb~nd 9 as vendor 1 to pay less tax to the Treasury. It is appa1~ent from the proceedings of this case that thero are two main issues upon which the outcome of this case depends. The first issue is whether the title ·deed 1 otherwise known as the Certificate to Right of Occupancy 9 produced at the trial by the appellant as exhibit D.3 9 was fraudulently obtained. The second issue is whether the sale agreement of the suit premises has any legal ·effect o . -., } 5 Let us sta.rt with the first issue. The learned trial judge made no specific finding on it. The relevant evidence on this issue comprises the testimony of the ' respondent 9 supported by exhibits P.2 (letter of Offer of Right of Occupancy) 9 P.3 (four revenue receipts in respect of fees for Certificate of Title) 9 Po4 (the mortgage deed on Right of Occupancy·title.No. 68-LRM) and :e. 5 (Payment Voucher issued b;y- Tanzania Housing Bank: for disburse:o.ent of loan). This evidence clearly shows that by the end of September 1977 there was a mortgage deecl between the Tanzania Housing Bank on the one side and the respondent ai.ld her late husband on the other side 9 under Yvhich the Right of Occupanc~r title No. 686-LRJI/I was made a security for a loan of shs. 80 9 000/= by the bank to the respondent and. her late husband. Consequent upon this mortgage 9 a ~cun of shs. 35 1 900/= was released. to the respondent· and her late husband on 21st October 1977 as per exhibit P.5o The q_uestion that arises here is in whose name or names was the Certificate of title No .. 686-LRM supposed to be? Obviously 9 since a Certificate of title of Right of Occupancy can be mortgaged only by the owner or owners of the ·title 9 it must follow that the certificate of title No. 686-Lill!.1 which was the subject of the mortgage must have been in the joint names of respondent and her late husbande The answer to the first crucial issue must therefore be that the Certificate of title No. 686-Lan.d Registry Moshi ...... J • • 6 (exhibit Do3) bearing solely the name of respondent's late husband was obtained fraudulently - that is 9 by deceit and for the purpose of dep.riving the respondent of her rights in the suit premises. With regaro. to tho second. main tssue 9 the lean1ed trial judge speci_fically found that 11 . . . the late Mu.biru had no capacity to solely sell the house to the defendant because the house was jointly owned by hi.mself and his wifeo Without the consent of his wife 9 the joint owner 7 I the vendor cou.1c1 not pass the title of the house to the d1::ifendant purchasGrn. ".Ve agree with the learned trial judge o We think that there are two other reasons why the appellant cannot obtain title 'to the suit premises on the basis of the sale agreement. The fi.rst reason was nc:,ted by the learned trial judge when she stated in a part of her judgement 11 0 0 • The vendor and purchaser colluded end in pari d e ~ < 2 ~ ~ f e r e n t sale agreements in order to pass lower taxes. By agreeing to sign the shs~ 500 1 000/:::: sale agreement 7 Exhibit Pc8 7 the purchaser stained his hai.~ds and tainted himself with iB.. egali ty whether for his bonefi t or for the benefit of the vendor oeo1r Tpe lGarned trial judge of course did not sufficiently articul.ate the law concerning contracts aimed at defrauding the internal revenue. The law on this point 9 as established throughout the coillillon __.J 7 law system., is -that such contracts are unenforceable. See the case of :i'!IILLER vs KARLINSKI (1954) 62 ToLoRo 85 and NAJ?IER vs NATIONAL BUSINESS AGENCY (1951) 2 ALL er 264. The contract of sale of the suit premises in this case was me.de 1.,mder two docu.rnents aimed. at deceiving the Treasur,1 as to the :proper tax liable to be paid for the trnnsactiono Clearly such contract was void 9 without an;y legal effect right from the beginning. Of course this does not mea..11 that the appellant has lost every- thing including the money he paid as purchase price. In law 9 he is entitled to the sum of shs. 500,000/= which he ·paid under th0 illegal contract and which appears to have been deposited in court by the respondent. The second reason why the appellant could not have obtained the title to the suit·premises, even if the sale agreement had not been tainted with illegality, is the fact that neither document containing the agreement bears any indication of' payment of stamp duty according to the Stamp Duty Act. By law, such J omission renders the sale agr0ement inadmissible as evidence in court 9 unless the party concerned pg,ys the stamp duty before the docv.ment is admitted as evidence. See the case of NIZAfd vs DEVONSHIRE STORES (1958) EA 729 and STflillEBJI NANJI Ltd~ vs MOHAI\1EDALI KASSAli BHALOO E. A. (1958) 762 •. For all the reasons stated above, we are thus 1 satisfied that this appeal has no Iileri ts whatsoever 8 and must be d:j_smissed in its entirety with costs. We order accordingly. DATED at DAR ES SALAAM this 3rd day of August~ -1995. F. L. l\TYALALI CHIEF JUSTICE L. Ni. l\11.AIGUv.IE JUSTICE OF APPEAL Il .. H, KISA.NGA JUST I CE OF APPEAL I certify that this is a tro_o copy of the origi~al. \ < ,) (· ,, ) '1 11 The appellant is en.titled to interest at bank: rate from the date of fj_ling the suit to. date of deli very of judgement~ In the final analysis therefore? this appeal partly fai·ls and partly succeeds to the extent that the appeal against the principal sum and costs fails 9 but the appeal against the order for payment of interest succeeds to the extent indicated above. Unde::c the circ·ur.o.stances of this. case 9 we think it is just that appellant be paid one- day of August? ,- 1995. F. L. l'lYALALI CHIEF' JUSTICE JUSTICE OF APPEAL R~ H.. KISANGA JUSTICE OF APPEAL this is a true copy of the original. ( l\~. S. I ) DEPUTY REGISTRAR