Johanna Else Astrid Van Beest vs Ayubu Mika Metili & Others (Civil Appeal No. 495 of 2023) [2025] TZCA 1303 (18 December 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM (CORAM; MWANPAMBO. J.A., MGONYA. J.A. And FELESHI. J.A.^ CIVIL APPEAL NO. 495 OF 2023 JOHANNA ELSE ASTRIP VAN BEEST, APPELLANT VERSUS AYUBU MIKA METILI 1ST RESPONPENT HAMAP HAMISI KIM 2NP RESPONPENT HAMISI RASHIP KIMU 3RP RESPONPENT (Appeal from the Judgment and Pecree of the High Court of Tanzania This appeal arises from the judgment of the High Court of Tanzania, Commercial Division (the trial court), delivered on 25 April 2023, which dismissed the appellant's claim for recovery of USD 63,000.00 (loaned sum) arising from the alleged breach of two agreements executed between Johanna Else Astrid Van Beest (the appellant) on the one hand, and Ayubu Mika Metili and Hamad Hamisi (Commercial Pivision) at Par es Salaam) (Mkeha, J.^ dated the 25th day of April, 2023 in Commercial Case No. 16 of 2021 JUDGMENT OF THE COURT 10th November & 18th December, 2025 FELESHI. J.A.:

Kim (the 1s t and 2n d respondents, respectively) on the other, relating to an irrigation farming project at Mererani, Simanjiro, Arusha Region. The background of this appeal, in a nutshell, is that the appellant is alleged to have advanced USD 40,000.00 pursuant to the first agreement dated 5.5.2017, and later advanced an additional USD 23,000.00 under the second agreement dated 4.8.2017, with both sums secured by the 3r d respondent's landed property, C.T. No.46654 situated at Mererani. As at 4.5.2019, the 1s t and 2n d respondents had not repaid the loaned sums thereby breaching the terms of the loan agreements the appellant, on 22.11.2021 instituted a suit against them as alluded to above. In that suit, the appellant sought a declaratory order that they had breached the loan agreements together with orders for repayment of the loaned amounts, interest and costs. Before the trial court, the appellant (PW1) testified that she had disbursed the loaned sums in accordance with the loan agreements (Exhibits PI and P2, respectively), albeit without adhering to the documentation processes prescribed therein. On their part, the 1s t and 2n d respondents (DW1 and DW2, respectively) admitted executing Exhibits PI and P2 but consistently denied any disbursement, performance, or receipt of the alleged sums. They contended that the 2

appellant failed to comply with the terms of the agreements which required disbursement to be strictly upon presentation of invoices and acknowledgment of receipt through signed payment vouchers. After evaluating the evidence of both parties, the trial court found that the appellant had not proved disbursement of the alleged amounts in accordance with the contractual conditions and consequently dismissed the suit with costs. Aggrieved, the appellant lodged the present appeal on three grounds:

1. That the trial court judgment leaves (sic) the appellant's application forjudgment on admission an unattended.
2. That the learned Trial Judge erred in law and fact by failing to enforce against the Defendants the second loan agreement dated 4h August 2017 (Exhibit P2) which shows that the appellant advanced a sum o f Forty Thousand United States Dollars to the 1st and 2nddefendants pursuant to first Loan Agreement dated 5thMay 2017 (exhibit PI).
3. That the learned trial judge failed to judiciously and fairly analyse the evidence that was before him as a resuit he dismissed the appellants suit At the hearing of the appeal, Mr. Rodgers Mlacha, learned advocate, appeared for the appellant. While the 1s t respondent appeared 3

in person, Ms. Neema Mtayangulwa, leaned advocate represented the 2n d and 3r drespondents. In amplification, the learned counsel for the appellant submitted regarding the 1s t ground of appeal that, the trial court ought to have entered a judgment on admission under Order XII Rule 4 of the Civil Procedure Code, Chapter 33 (henceforth the CPC). According to him, the 1s t and 2n d respondents having admitted to have receiving USD 40.000.00 pursuant to clause 1.0 of Exhibit PI, the appellant was entitled to judgment on admission. As to the 2n d and 3 rd grounds of appeal, Mr. Mlacha faulted the trial court for not appreciating the binding force of the parties' agreements. To bolster his argument, he referred us to the Court's decision in Miriam E. Maro v. Bank of Tanzania [2020] TZCA 1789 on the well- settled principle that, parties are bound by contracts they freely enter into. According to him, Exhibit P2 contained a clear acknowledgment by the 1s t and 2n drespondents that they had received USD 40,000.00 under the first agreement (Exhibit PI). He argued that, clause 1.0 of Exhibit P2 expressly states that "the lender advanced to the borrowers a sum USD 40.000.00” and that, having signed the agreement, the respondents could not resile from that acknowledgment. He was emphatic that, as

both exhibits: exhibit 1 and 2 were admitted during trial without objection, the trial court was bound to take cognisance of their contents as proved in respect of both the USD 40,000.00 and USD 23,000.00. Mr. Mlacha added that, in the absence of fraud, coercion or misrepresentation capable of vitiating the execution of the agreements, clause 1.1 of Exhibit P2 related exclusively to the additional sum of USD 23.000.00 supplementing Exhibit PI, and that it bound the trial court to enforce it. He therefore faulted the trial judge for holding that the issue of disbursement ought to be established in accordance with Exhibit PI, arguing that such an approach undermined the sanctity of contract since Exhibit P2 was a separate and independent agreement with its own operative terms. This, he submitted, was consistent with the appellant's testimony during cross-examination that she disbursed the additional USD 23,000.00 in cash on the very date Exhibit P2 was executed, the evidence corroborated by clause 1.4 of that agreement, in which the respondents acknowledged their obligation to repay the full USD 63.000.00 plus interest. To buttress his position, counsel referred us to section 37 of the Law of Contract Act, Chapter 345; the decision in Robert Scheltens v. Sudesh Kumara Varma & Others [2022] TZCA 508; clause 1.2.5 of

Exhibit PI and clauses 1.0 and 1.1 of Exhibit P2, ail of which, he argued, establish that once the parties agreed to execute Exhibit P2, they became squarely bound by its terms, thereby superseding and rendering nugatory the disbursement clauses in Exhibit PI. Besides, he referred us to Cheshire, Fifoot and Furmston's Law of Contract (14th Edition) at page 139, and to sections 79, 80 and 117 (5) and (6) of the Land Act, Chapter 113. He argued that everything contained in Exhibits PI and P2 respectively, boils down to three terms of the contract: one, the provision of the loan sum by the appellant; two, repayment of it by the respondent by 4.5.2019; and three, the securing of the loaned sum by the 3rd respondents property. On the other hand, it was contended that, the parties intended clause 1.0 of Exhibit P2 to form an operative term on disbursement which superseded the procedural clauses of Exhibit PI and the security involving the 3r d respondent's property which could be realized upon default. In the end, Mr. Mlacha submitted that, as the trial court misapplied the evidence, he urged the Court, as the first appellate court, to revisit and re-appraise the evidence under rule 36 (1 (a) of the Court of Appeal Rules, 2009 (the Rules), and to make its own findings and determination. 6

On the other hand, the 1s t respondent, appearing in person, argued that Exhibit P2 was not an independent contract but a continuation of Exhibit PI, under which, no ioan money was ever disbursed or paid to him and the 2n d respondent. He said that the appellant had failed to meet the express preconditions for disbursement under both agreements, adding that they signed the second agreement not because any loan money had been disbursed earlier, but in the expectation of implementing the project if the appellant complied with the stipulated disbursement requirements. He thus urged the Court to dismiss the appeal. On her part, Ms. Mtayangulwa relied on their filed written submissions in reply to support the trial court's reasoning and conclusions. On the first ground, she submitted that the claim for judgment on admission was untenable. Citing Order XII Rule 4 of the CPC, the learned advocate argued that, no unequivocal admission had ever been made. She referred us to James Funke Gwagilo v. Attorney General [2004] T.L.R. 162 and Anthony Ngoo 8 t Another v. Kitinda Kimaro [2015] TZCA 269 to amplify the principle that parties are bound by their pleadings and that courts cannot grant an unpleaded relief. She added that, had the trial court entertained what

was submitted in the appellant's counsel's final submission, the respondents would have been denied the right to be heard. She thus urged the Court to dismiss the ground for want of merit. With respect to the second and third grounds of appeal, counsel submitted that the appellant bore the legal burden of proving disbursement but failed to discharge it. She emphasized that Exhibit P2 must be read together with Exhibit PI because the former expressly incorporated the latter pursuant to clause 1.3 thereof. According to her, the appellant could not selectively rely on terms in Exhibit P2 to support its claim of disbursement while disregarding the incorporated provisions of Exhibit PI. She maintained that the requirement for invoices and payment vouchers had never been removed or amended. Counsel therefore argued that Exhibit P2 could not stand independently, as both its preamble and clause 1.3 demonstrate its dependence on Exhibit PI. She cited Philipo Joseph Lukonde v. Faraji Ally Said [2020] TZCA 1779 and JNM Mining Service Limited v. Mineral Access Systems Tanzania Ltd [2022] TZCA 686 to reinforce her position that parties are bound by the terms of their contracts. 8

She further submitted that the appellant's reliance on section 117 of the Land Act was misplaced, as the issue had neither been pleaded nor framed as an issue before the trial court. She accordingly prayed that the appeal be dismissed. In rejoinder, counsel for the appellant reiterated his earlier submissions without introducing anything new. We have anxiously considered the record of appeal, the rival submissions and the applicable law. The issue for our determination is whether the appeal is meritorious. We propose to begin with the complaint that the trial court failed to address the prayer for judgment on admission. We think this ground should not detain us. It is clear from the record, specifically at pages 66, 67, and 68 of the record of appeal that, although counsel for the appellant on 12.10.2022 prayed for judgment on admission based on clause 1.0 of Exhibit P2, he subsequently abandoned that prayer and thereafter fully participated in the final pre-trial conference during which five issues were framed and the case was fixed for hearing on 26.10.2022. As a result, none of the framed issues concerned admission, and the case proceeded to a full trial. In view of the above, we are settled in our minds that any prayer for judgment on admission must be deemed to have been abandoned,

and it was improper for the appellant's counsel to revive it in his closing submissions. Nevertheless, even if the trial court had been required to pronounce itself on the prayer, the same was untenable under Order XII Rule 4 of the Civil Procedure Code, which provides that: "4. Any party may at any stage o f a suit, where admissions o f fact have been made either on the pleading, or otherwise, appiy to the court for such judgment or order as upon such admissions he may be entitled to, without waiting for determination o f any other question between the parties; and the court may upon such application make such order, or give such judgment, as the court may think ju st" [Emphasis added] In view of the foregoing discussion, and considering the applicable law, it is evident to us that the appellant, having abandoned her prayer for judgment on admission on 12.10.2022 and proceeded to a full trial, disentitled her from complaining against the trial court. This ground therefore lacks merit and is dismissed. We now turn to the complaints that the trial court failed to enforce the second loan agreement and that it failed to properly evaluate the evidence. We think it is necessary to revisit the evidence as per the 10

dictates of rule 36 (1) (a) of the Rules to enable the Court to appreciate the nature of the agreements between the parties. The guiding principles in our case are: one, he who alleges must prove and should do so on the preponderance of probability -see sections 118 and 3 (2) (b) of the Evidence Act, Chapter 6; two, parties are bound by the agreements they freely entered into -see Simon Kichele Chacha v. Aveline M. Kilawe [2021] TZCA 3558; and three, contracts must be interpreted according to their express terms, not according to assumptions or implied novation -see CRDB Bank Pic & Another v. Asina Mfaume Kawawa [2025] TZCA 1174. The appellant's argument rests on the proposition that Exhibit P2 constitutes a stand-alone admission of receipt of USD 40,000.00 by the 1s t and 2n d respondents. However, the language of the agreement does not support this. The preamble to Exhibit P2 states that the second loan agreement was executed "in pursuance" of the first, where clause 1.3 expressly incorporates the terms of Exhibit PI. This incorporation was deliberate and unequivocal. Under Exhibit PI, clauses 1.2.1, 1.2.2, and 1.2.3 set out detailed preconditions for disbursement; the issuance of invoices followed by disbursement and then the signing of payment vouchers acknowledging receipt. Besides, clause 1.1 also required the ii

appellant to ensure positive project progress on behalf of the respondents. None of these conditions were superseded or waived by Exhibit P2. There is no clause in Exhibit P2 that varies, deletes or negates them. On the contrary, clauses 1.3 and 1.4 reaffirm their continued application. Therefore, the contention that Exhibit P2 was an independent contract that dispensed with the need for invoices and payment vouchers is unsustainable. If the parties intended Exhibit P2 to replace Exhibit PI or to waive the preconditions for disbursement, nothing prevented them from stating so expressly. It is trite law that contracts must be interpreted according to their express terms, not according to assumptions or implied novation. As this Court has repeatedly emphasized, parties are bound by the agreements they freely enter into, and courts cannot rewrite the terms for them. See JNM Mining Service Limited v. Mineral Access Systems Tanzania Ltd (supra). Having settled that Exhibit P2 must be read together with Exhibit PI, the next question is whether the appellant proved disbursement of the alleged sums in accordance with the terms of the contract. The burden of proof lay squarely upon her, as the party alleging. The appellant's testimony was that she advanced USD 40,000.00 and later 12

USD 23,000.00, but during cross-examination she admitted that she had not received any invoices from the respondents before allegedly disbursing the amounts and that she did not tender any payment vouchers signed by the respondents. She admitted that she did not indicate in her witness statement the dates or mode of the alleged disbursements and conceded that neither agreement provided that mere execution of the contract constituted evidence of disbursement. On the face of these admissions, the appellant was left with nothing but the bare assertion that money was paid. In contrast, the 1s t and 2n d respondents consistently denied receiving any money and insisted that they never issued invoices for the project. Their evidence was consistent with the written terms of the agreements. In Abualy Alibhai Azizi v. Bhatia Brothers Ltd [2000] T.L.R. 288, the Court reaffirmed that the principle of sanctity of contract restrains courts from injecting clauses or waiving contractual requirements where the parties have not done so themselves. It was underscored in part that: "The principle o f sanctity o f contract is consistently reluctant to admit excuses for non performance where there is no incapacity, no fraud (actual or constructive) or

misrepresentation ; and no principle o f public policy prohibiting enforcement ." Flowing from the evidence of the parties and the law, we are, as the trial court did, persuaded that the appellant failed to prove disbursement. We thus find no misdirection in the evaluation of evidence by the trial court. Counsel for the appellant urged us to treat the wording of clause 1.0 of Exhibit P2 as conclusive proof that the l^and 2n d respondents had received USD 40,000.00 under Exhibit PI. We are unable to do so because recitals or introductory statements in a contract do not, by themselves, constitute evidence of performance. Where the same contract sets out clear mechanisms for establishing performance, such as invoices and payment vouchers, those mechanisms must be satisfied. In this case, the parties had not invoked clause 1.2.5 under Exhibit PI to amend and vacate their clear agreed payment mechanisms. So, clause 1.0 cannot be used to contradict or nullify the express operational clauses under Exhibit PI. To treat it as proof of disbursement would be to rewrite the parties' agreement contrary to settled legal principles. We are also unpersuaded by the submission that clause 1.2 of Exhibit P2 created a new disbursement mechanism inconsistent with 14

Exhibit PI. Even if clause 1.2 contemplated disbursement, its operation remained subject to clause 1.3 which incorporates the terms on disbursement from Exhibit PI. There was no inconsistency and therefore no displacement of the earlier terms. The appellant's counsel's argument that doctrinal principles from Cheshire, Fifoot and Furmston's Law of Contract (supra) relating to the effect of subsequent agreements could render the disbursement terms of Exhibit PI nugatory is, in our considered view, misplaced, as the necessary factual predicate, namely the existence of clear inconsistency or explicit variation is absent in this case. Regarding the issue of security over the 3r d respondent's property, this too cannot arise where no disbursement was proved. Security only crystallizes upon default of a proven loan. Without proof that any money was advanced there was no enforceable loan to lay a foundation for enforcing the security. The High Court was therefore correct in declining to make any order relating to the 3r d respondent's property. Finally, in view of the foregoing, we find the complaint that the trial court failed to judiciously evaluate the evidence is without merit. There is nothing on record to suggest that the trial court

misapprehended the evidence, applied a wrong principle or omitted any material fact. Its findings were justified and we decline to disturb them. In the end, we are satisfied that the appeal lacks merit in its entirety and we consequently dismiss it with costs. DATED at DODOMA this 16th day of December, 2025. Judgment delivered virtually this 18thday of December, 2025 in the presence of Mr. Rodgers Mlacha, learned counsel for the Appellant, the 1s t Respondent in person, Ms. Neema Mtayangulwa learned counsel for the 2n d and 3r d Respondents and Mr. John Banene, Court Clerk; is hereby certified as a true copy of the original. L. J. S. MWANDAMBO JUSTICE OF APPEAL L. E. MGONYA JUSTICE OF APPEAL E. M. FELESHI JUSTICE OF APPEAL 16