National Bank Of Commerce Ltd vs Athanasia T. Massinde & Another (Civil Appeal No. 509 of 2023) [2026] TZCA 313 (18 March 2026)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA fCORAM: MWARI3A. 3.A., KENTE, 3.A. And ISMAIL 3.A.) CIVIL APPEAL NO. 509 OF 2023 NATIONAL BANK OF COMMERCE LTD ..................................... APPELLANT VERSUS ATHANASIA T. MASSINDE................................................ 1 st RESPONDENT ABETI COMPANY LTD...................................................... 2 nd RESPONDENT (Appeal from the 3udgment and Decree of the High Court of Tanzania, Commercial Division at Dar es Salaam) (M akanLi) dated 12th day of April, 2019 in Commercial Case No. 92 of 2016 JUDGMENT OF THE COURT 30th June, 2025 & 18th March, 2026 MWARIJA. J.A.: This appeal originates from the decision of the High Court of Tanzania, Commercial Division at Dar es Salaam in Commercial Case No. 92 of 2016 (the suit). The respondents, Athanasia T. Massinde and ABETI Company Ltd (the 1s t and 2n d respondents respectively) sued the appellant, the National Bank of Commerce Ltd seeking inter alia, an order directing the appellant to discharge the mortgaged property; that is, a certificate of title in respect of Plot No. 565 Block DD, Unyankhae in Singida Municipality (the property) hitherto held by the 1s t respondent. The property was mortgaged by the 1s t respondent as a collateral for a loan of T7S 150,000,000.00 obtained by her from the appellant vide a loan facility letter dated 20/2/2009. It was mortgaged vide a deed of assignment entered by the appellant and the 1s t respondent on 7/1/2016. The loan, which was intended to be used to construct additional building to a school owned by the 1s t respondent, operating by the name of the 2n d respondent was repaid within the period of three years on equal instalments excluding a grace period of six months as stipulated in the term loan agreement. By 13/7/2015 the 1s t respondent had discharged its obligation of repaying the loan with interest. According to the plaint, after having discharged the obligation of repaying the loan, the 1s t respondent wrote to the appellant requesting for discharge of the mortgage and return of the certificate of title to the property. However, according to her, despite having paid the discharge fee as demanded, the appellant refused to release the certificate of title. The respondents thus decided to file the suit. The respondents claimed that, as a result of the appellant's refusal to discharge the mortgage, they suffered loss because they were denied the use of the property to obtain more loans from other financial institutions. They contended that, following improved academic performance of the school, the enrolment of students increased and therefore, they intended to expand the facilities and acquire school buses. To achieve that goal, they intended to secure more loans by use of the property as a collateral. It was the respondents claim that, the refusal by the appellant to release the certificate of title caused them to suffer loss. They claimed for the following reliefs: "(a)The Honourable trial court be pleased to order the defendant to discharge the mortgage o f the property immediately. (b) That, the Honourable trial court be pleased to order the defendant to pay special damages to the plaintiffs at the tune o f Tshs. 389,150,000/- being the loss suffered by [them] due to non-discharge o f the mortgage property. (c) That, the Honourable trial court be pleased to order the defendant to pay the plaintiffs general damages for breach o f contract and inconvenience caused to her at the rate the Honourable court may deem fit to grant. (d) Interest on (b) above at the rate o f 24% from the date o f filing this suit to the date o f judgment. (e) Interest at the court's rate from the date o f judgment till final payment (f) Costs o f this suit be paid by the defendant. (g) Any other relief the Honourable court may deem fit to grant " In its written statement of defence, the appellant denied the claims stating that, it was justified to retain the certificate of title after the respondents had discharged their obligation of repaying the loan. It contended that, during the pendency of the loan agreement, the respondents instituted a suit against it relating to the subject matter of the loan. In paragraph 5 of the written statement of defence, the appellant stated as follows: "5. That the contents o f paragraphs 8, 9, 10, 11 and 12 are strongly disputed. The defendant states that It was not in the position to release the title as there was a pending matter in court concerning the same subject matter instituted by one Athanasia T. Massinde t/a Abeti Primary School against the defendant" The appellant prayed for dismissal of the suit with costs. Before the hearing of the suit, the trial court framed the following six issues for determination: "1. Whether the 1st plaintiff did apply for and was advanced a loan facility by the defendant 2. Whether the 1st plaintiff mortgaged the property on Piot No. 565 Block DD/Unyakhae area Singida Municipality [in the name of] Athanasia Tabu Ngeieja as a collateral for the loan facility advanced to her by the defendant 3. Whether the property that was used as a collateral by the 1st plaintiff to secure a loan from the defendant was subsequently transferred to the 2n dplaintiff by way o f assignment 4. Whether upon paying full amount plus interest in servicing the ban facility , , the defendant was justified to refuse to release the 1st plaintiff's collateral. 5. If the 4h issue is answered in the negative, whether the plaintiffs suffered any damages. 6. What reliefs are the parties entitled to." At the hearing of the suit in the High Court, the respondents led evidence through Athanasia T. Massinde (PW1), Christopher Nestory Bhuka (PW2), Victoria Revocati (PW3) and Daudi Charles Mlau (PW4). The other person, Abdallah Abdullatif Muhsin, who was intended to be called as the fifth witness, did not appear and his witness statement was struck out under Rule 56 (2) of the High Court (Commercial Division) Procedure Rules, GN. 250 of 2012 (the Commercial Court Rules). In her evidence, the 1s t respondent, contended that, due to improved academic performance of the school, hence an increase in the number of students, there arose the need for expansion of the infrastructure and purchase of school buses. According to her, that plan was hindered by the appellant's act of refusing to discharge the mortgage to enable the respondents use the title to secure a new loan from other financial institutions. She averred that, the school had to hire buses costing a total of TZS 30,000,000.00 after every three months with effect from October 2015. It was her further evidence that, the school lost the opportunity of enrolling at least 160 extra students in 2016 and 2017, resulting in estimated loss of income to the tune of TZS 208,870,000.00 per year. She stated further that, the respondents had prepared a business plan targeting realization of TZS 904,000,000.00 by away of a loan as at January 2016, to be utilized after having obtained a certificate of incentives from the Tanzania Investment Centre on 12/10/2015. She said that, the plan could not work due to the appellant’s act of withholding the title deed. It was PWl's further evidence that, the loss had also resulted from the respondent's failure to purchase three buses in September 2015 thus continuing to incur hiring costs. She added that, the appellant's act was the cause of the respondent's inability to expand the school facilities to the extent directed in the 2014 Zonal Education Inspectors' report. On his part, PW2 Christopher Nestory Bhuka, who was the school Manager, testified that, he served a demand notice to the appellant on 27/05/2016. He went on to support the evidence of PW1 that, the school had improved in its performance and thus due to the increase in the number of students, it became necessary to also purchase buses to carter for their transportation but because of the failure to obtain loans, the respondents had to hire buses. It was his evidence also that, the respondents had to incur the costs of drafting buses hire contracts and hire charges amounting to TZS 14,940,000/= and TZS 4,410,000/= respectively. To substantiate those costs, the respondents called as a witness, Victoria Revocati (PW3) who testified that, she was the advocate who drafted the buses' hire contracts. On cross-examination however, she admitted that, the receipts, which she intended to tender, lacked her firm's name and that the same were also unclear as regards the date of their issue. Consequently, the same were not admitted in evidence. As for PW4, Daudi Charles Mlau, his evidence was to the effect that; he was the owner of a minibus, make; Coaster, registration No. T341 BRV hired to the respondents for use as a school bus. He told the trial court that, he hired it at a monthly rate agreed in the contract between him and the respondents. He said however, that the payments to him were made in cash and without invoices or issuance of receipts. On its part, the appellant intended to call one Edward Xavery Nguya as its witness. That person, who was a former employee of the appellant, and whose witness statement had been filed, could not be produced for cross-examination. The appellant's prayer to call another person in the place of the intended witness was refused by the court. It consequently proceeded to strike out the statement under rule 56 (2) of the Commercial Court Rules. In its judgment, the trial court answered issues Nos. 1 and 2 in the affirmative while issue No. 3 was answered in the negative. It found that, there was no proof of transfer or assignment of the title deed to the 2n d respondent, because the memorandum and articles of association were insufficient without further evidence. As to issue No. 4, the same was answered in the negative. The trial court held that, the appellant's refusal to discharge the mortgage after the respondents had discharged their obligations under the loan agreement, was unjustified. On issue No. 5, the court found that, the respondents did not prove special damages. It found that, the claims were theoretical, having not been substantiated. It however, awarded general damages of TZS 70,000,000/= for inconvenience, stress and frustration. With regard to issue No. 6, the court declined to award interest and costs as prayed by the appellant. On the prayer for a discharge order, it found that, the same had been overtaken by events as the title deed had already been released. Aggrieved by the decision of the trial court, the appellant preferred this appeal on the following six grounds, namely: "1. [That, the] issues as framed by the court do not appear in the proceedings as required by the law. 2. The court erred in law and fact by failing to consider the fact that the plaintiff did not pay [the] discharge fee so as to enable the defendant to release the title deed. 3. The Honourable trial Judge erred in law and fact by delivering a ruling dated 15th March 2019 on whether a witness statement could be substituted or not without affording the parties the right to be heard. 4. The learned trial Judge erred in law and fact by holding that\ the Commercial Court Rules do not allow replacement/substitution o f a witness statement even if the witness who swore/affirmed the lodged witness statement cannot be procured. 5. The learned trial Judge erred in law and fact by striking out the witness statement o f Mr. Nguya ... and denied the defendant the right to be heard. 6. Having found that no special damages were proved ' the learned trial Judge erred by awarding general damages to the tune o f TZS 70,000,000/- without anyjustification." At the hearing of the appeal, the appellant was represented by Dr. Onesmo Kyauke, learned counsel while the respondent was represented by Mr. Jeremia Mtobesya, also learned counsel. The learned counsel for the appellant did not file written submissions in compliance with rule 106 (1) of the Tanzania Court of Appeal Rules, 2009 (the Rules) and therefore, presented oral arguments in support of the appeal in accordance with rule 106 (10) (b) of the Rules. At the outset, the Dr. Kyauke informed the Courtthat, hehad decided to abandon the 1s t ground of appeal. He thus submitted on the remaining grounds. With regard to the 2n d ground of appeal, the learned counsel argued that, the trial court erred in its finding that, the appellant had refused to discharge the mortgage. According to the learned counsel, the discharge was conditional uponpayment by the 10 respondents, of discharge fee of TZS 70,000.00 for each of the collaterals and that obligation had not been met at the time of filing the suit. When probed however, Dr. Kyauke admitted that, the appellant's defence was existence of a pending suit filed by the respondents against the appellant and that, the defence that the respondents had not paid the discharge fee was not raised. Submitting further on the 3rd , 4th and 5th grounds of appeal, Dr. Kyauke contended that, the High Court erred in striking out the witness' statement while what was under consideration was the application for adjournment of the suit. He argued that, at that stage, the appellant could not have asked the court to consider the weight of the contents of the statement which was intact unless it was challenged through cross- examination. With regard to the 6th ground, it was the submissions of Dr. Kyauke that, the trial court erred in awarding the respondents general damages after they had failed to prove special damages. He argued that since general damages were not claimed, the court should not have awarded the same because they are not a substitute for special damages. ii In reply to the submissions made in support of the 2n d ground of appeal, Mr. Mtobesya opposed the contention that, the appellant refused to discharge the mortgage because the respondents had not paid the discharge fee. According to him, such a defence was an afterthought because in its written statement of defence, the reason given by the appellant was that, it refused to do so because the respondents had instituted a suit against it at the time when the loan agreement was still subsisting. On the 3r d and 4th grounds of appeal, the reply by Mr. Mtobesya was that, the witness's statement was properly struck out after the appellant had failed to produce its witness for cross-examination. He argued further that, the learned counsel sought an adjournment, which was refused by the court and as a consequence of the witness's failure to attend, his statement was struck out in accordance with rule 56 (2) of the Commercial Court Rules. The learned counsel went on to argue that, the above stated rule does not provide for substitution of another person's statement for that of the witness who had failed to appear. With regard to the 5th ground, he argued that, the appellant was not denied the right to be heard. According to the learned counsel, the appellant waived that right by its failure to cause the attendance of its witness. 12 As to the complaint in the 6th ground of appeal, that the trial court erred in awarding the respondent general damages of TZS 70,000,000.00, the learned counsel contended that, the award was proper because the trial court considered the circumstances of the case and in the exercise of its discretion, assessed and awarded that amount. He cited the case of Felician Mhandiki v. Barclays Bank (Civil Appeal No. 82 of 2016) [2024] TZCA 1319 to support his argument. In rejoinder, Mr. Kyauke maintained his argument as regards the complaint in the 3rd , 4th and 5th grounds of appeal. He stressed that, since the matter at issue was whether the hearing should be adjourned, the trial court erred in striking out the witness's statement without giving the learned counsel for the respondents the opportunity to be heard. He submitted that, the learned trial Judge should have exercised the inherent powers vested in her by the Judicature and Application of Laws Act, Chapter 358 of the Revised Laws, to call upon the appellant to address the court after having refused adjournment and before it proceeded to strike out the witness statement. We have considered the submissions of the learned counsel for the parties. As pointed out above, Dr. Kyauke abandoned the 1s t ground of appeal and argued the remaining grounds. In determining the appeal, we wish to begin with the 3rd , 4th and 5th grounds of appeal. 13 The three grounds arose from the trial court's refusal to grant the prayer for adjournment made by the appellant's counsel with a view to file a witness statement of another person in substitution of the one made by a witness, one Edward Xavery Nguya, who could not be produced for cross-examination. It was argued further that, apart from declining the prayer for adjournment without affording the appellant's counsel the opportunity to be heard, the trial court proceeded to strike out the witness statement on account that, the same could not be substituted by that of another person. The relevant proceedings that gave rise to the impugned decision appear at pages 1099 and 1100 of the record of appeal. The relevant part of Dr. Kyauke's submission is at page 1099 of the record of appeal. He submitted as follows: "We filed a witness statement o f Mr. Xavery [Nguya] o f 6/7/2017. However, Mr. Nguya is no longer with the Bank and we have made efforts to procure him but late yesterday he said he was no longer interested to testify for the Bank... I thus pray for an adjournment to enable me file another witness statement in respect o f another witness. We are asking for substitution of witness and/or replacement of the witness statement. So, we pray an adjournment so 14 that we can make a format application to this effect." [Emphasis added]. That submission was opposed by Mr. Mtobesya who addressed the court on the effect of a party's failure of to produce a witness for cross- examination, that such a witness statement is to be struck out. He argued further that, the reasons advanced by the respondents' counsel for their failure to produce the witness were unsubstantiated thus not viable. In her ruling, the learned trial Judge considered the issue which the learned counsel for the respondents intended to raise in a formal application, in case his prayer for adjournment was to be granted. It is whether a statement of a witness who has failed to appear for cross- examination can be substituted by that of another person intended to be called by a party. The learned trial Judge ruled as follows: "What a party is supposed to do [after filing a witness statement] is to present the witness in court for cross-examination. I f such witness cannot be procured then there is no room for replacement/substitution o f the witness statement... Secondly, the Rules do not allow further and or additional witness statement because rule 49 (2) o f the Rules requires that 15 witness statement in respect o f witnesses to be reiied upon by the parties to be filed within seven (7) days after the conciusion o f mediation. In that respect, the court cannot order an adjournment on the basis that the counsei for the defendant cannot procure the witness and he wants to apply for substitution or replacement of the witness and witness statement," Having said so, the learned trial Judge proceeded to strike out the witness statement and consequently determined the suit on the basis of the respondents' evidence only. The issue which arises from the three grounds under consideration is whether the appellant was afforded the opportunity to be heard before the statement of the witness was struck out. It is obvious from the reproduced part of the proceedings, that the parties were not heard on that issue. We find, with respect that, the learned trial Judge decided the issue which, was intended to be raised by the appellant's counsel in a formal application. Since that decision was the basis of declining the prayer for adjournment made by the appellant's counsel, we agree with him that the appellant was denied the right to be heard. The effect is to render the ruling and the proceedings that followed, a nullity. That finding suffices to dispose of the appeal. For this reason, we do not find the need for considering the other grounds of appeal. In the event, we nullify the ruling dated 15/3/2019, the subsequent proceedings and the resultant judgment. The record should be remitted to the trial court for continuation of proceedings by another Judge from the stage immediately before the ruling which has been nullified. DATED at DODOMA this 16th day of March, 2026. A. G. MWARDA JUSTICE OF APPEAL P. M. KENTE JUSTICE OF APPEAL M. K. ISMAIL JUSTICE OF APPEAL The Judgment delivered this 18th day of March, 2026 in the presence of Ms. Hamisa Nkya, learned counsel for the appellant and Mr. Deogratius Mahinyila, learned counsel holding brief for Mr. Jeremia Mtobesya, learned counsel for the respondents connected vide video facility from Dar es Salaam and Mr. Soud Omar, Court Clerk, is hereby certified as a true copy of the original. 17