The High Court of Tanzania dismissed most of an employee-borrower’s appeal over staff loans, upholding default liability, notice service, damages, interest, and costs.
High Court appeal over a loan default dispute: the borrower breached the agreement, and there was no credible proof the bank attached or sold the motor vehicles.
The court found that the 1st defendant breached the credit facility agreement by unlawfully charging interest and penalties before the expiry of the grace period and miscalculating the outstanding debt. The defendants failed to substantiate the lawfulness of their calculations or justify recovery measures. The court held that the plaintiffs were entitled to compensation for loss of profit, but only to the extent proven by the evidence.
The defendants breached their obligations under the facility letters by failing to repay the outstanding loan amounts. The plaintiff proved the outstanding sum and is entitled to payment, interest, and general damages. Claims for certain interests and enforcement of securities were not specifically proved and are not granted at this stage.
The Plaintiff proved, on a balance of probabilities, that the Defendants breached the terms of the loan facility by failing to repay the outstanding amount of USD 658,841.55. The 2nd Defendant remained liable as guarantor, having participated in and consented to the contract variations. The Defendants' failure to dispute the outstanding amount in demand notices and their offer to settle for a lesser sum further supported the Plaintiff's claim.
The High Court held that the defendants breached loan facility terms by failing to repay within the agreed periods and awarded the bank the outstanding debt and enforcement remedies.
The discharge of mortgage was fraudulent as the defendants used forged documents; the plaintiff bank is entitled to enforce the mortgage and recover the outstanding loan amount with interest and costs.
The High Court granted an interim injunction restraining sale of stock from two shops pending determination of the main application over receiver powers and security.