Siginon Tanzania Limited vs CFAO Motors Tanzania Limited (Civil Appeal No. 757 of 2024) [2025] TZCA 1256 (11 December 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM (CORAM: MWANDAMBO. J.A.. MDEMU. J.A.. And MGEYEKWA. J.A/l CIVIL APPEAL NO. 757 OF 2024 SIGINON TANZANIA LIMITED ...................................................... APPELLANT VERSUS CFAO MOTORS TANZANIA LIMITED .......................................... RESPONDENT [Appeal from the Judgment and Decree of the High Court of Tanzania, (Commercial Division) at Dar es Salaam] (Nanqela, J.) dated the 5th day of October, 2023 in Commercial Case No. 06 of 2023 JUDGMENT OF THE COURT 3rd & 11th December, 2025 MGEYEKWA. J.A. The appellant, Siginon Tanzania Limited has lodged an appeal against the ruling of the High Court of Tanzania at Dar es Salaam in Commercial Case No. 06 of 2023 dated 5th October 2023. Before turning to the merits of the appeal, it is apposite to set out, in brief, the background giving rise to the dispute. The appellant is a limited liability company duly incorporated under the Companies Act, Cap 212. In 2014, it entered into a commercial arrangement with CFAO Motors Tanzania Limited, the respondent, for the supply of trucks. Under that arrangement, the respondent was to process an order for thirty (30) brand-new Mercedes-Benz Actros Model 2641 trucks. Upon receipt of the local purchase order, the respondent advised that only ten (10) trucks of the specified make and model were then available. By a letter referenced CFAO/SLQ/20140050-B dated 4th August, 2014, the respondent issued its formal offer, quoting the price of Euro 98,850.00 per truck, exclusive of duty and VAT totaling Euro 988,500.00 for the ten trucks available. The appellant accepted the offer, culminating in the parties executing a contract for the purchase of the said trucks. Thereafter, the appellant furnished the respondent with its certificate of incorporation, certificate of incentive, and approved list of capital. Following this arrangement, the respondent delivered the ten trucks to the appellant, which then commenced transport operations without interruption. This continued until 6th January 2017, when the appellant sought renewal of the trucks' registration. At that stage, the Tanzania Revenue Authority (TRA) declined to renew the annual motor vehicle licences, instructing that renewal would not proceed until a physical verification of the trucks had been carried out. On 9th January 2017, TRA officers visited the appellant's premises and conducted a physical verification. After that exercise, the TRA advised on the status of the renewal process. Shortly thereafter, on 17th January 2017, the TRA issued a notice of seizure dated 18th January 2017. Subsequently, on 15th March 2017, the Commissioner issued a tax demand of TZS 554,298,689.96 against the appellant for alleged possession of uncustomed goods. Aggrieved, the appellant instituted a suit before the High Court (Commercial Division), alleging breach of contract by the respondent and seeking compensation for financial losses arising from the respondent's conduct in relation to the sale of the said trucks. The appellant sought, the following reliefs: (i) a declaration that the respondent's acts constituted breach of contract and adversely affected the appellant's finances and reputation; (ii) specific damages of USD 4,00,00.00; (iii) legal fee of USD 105,000.00 and trucks restoration costs of USD 350,000.00; (iv) depreciation of truck costs of USD 784,195.00; (v) compensation for drivers' payments for four years amounting to TZS 288,000.000.00, (vi) TZS 14,888,947.00 for insurance and TZS 64,703,478.00 for inspection fee; (vii) TZS 838,427,024.00 for bank loan interest; (viii) general damages (ix) costs of the suit; (x) interest at commercial and court rates; and (xi) any other reliefs the court may deem just to grant. The suit was, however, confronted with a preliminary objection raised by the respondent asserting that it was time-barred. The High Court upheld the objection and dismissed the suit for being time barred. Undaunted, the appellant has preferred an appeal to the Court. In the memorandum of appeal, filed on 20th September, 2024. The appellant has set forth nine grounds of appeal, which may be paraphrased as follows: 1. The High Court erred in iaw and facts by upholding the respondent objection without considering facts that up to 17th and 18th January, 2017, any inform ation on the non-processing o f Tanzania Investm ent Centre incentive on taxes during clearance was not within the knowledge o f the appellant and he could not substantiate the cause o f action for breach o f contract without written confirm ation from Tanzania Revenue Authority. 2. The High Court erred in law and facts by upholding the respondent's objection without considering the appellant's averm ent and evidence that the decision by Tanzania Revenue Authority on trucks being declared uncustomed goods was issued on 17th and 18th January, 2017. 3. The High Court erred in iaw by upholding the respondent's objection by not putting into consideration damages as one o f the im portant elements in a su it for breach o f contract and is complete when a ll elements are completed in a breach. 4. The High Court erred in law by holding that the commencement o f investigation on seized trucks' registration cards triggered reckoning o f time. 5. The High Court erred in law and facts by upholding the respondent's objection without considering that rights conferred in writing (documentary) in the form o f truck registration cards in the hands o f Siginon could only be invalidated or nullified by another written cancellation from the same authority rejecting the cards in possession by appellant. 6. The High Court erred in law by holding that time is reckoned from the date a claim ant was verbally told about the investigation process without written confirmation. 7. The High Court erred in law by not considering the discoverability principle in m atters o f facts which are in the custody o f a third party who is not a plaintiff. 8. The High Court erred in law holding that the respondent would file a su it based on an unsubstantiated statement. 9. The High Court erred in law by entertaining a prelim inary objection based on evidence rather than on a point o f law. At the hearing of the appeal, the appellant was represented by Mr. Paschal Kamala, learned counsel, whereas the respondent appeared through Ms. Samah Salah, learned counsel. The appellant's written submissions filed on 17th May 2024, were duly countered by the respondent's written submissions in reply filed on 21st June 2024. Both sets of submissions were adopted at the hearing. In his submissions, Mr. Kamala elected to argue grounds one through eight co-jointly, focusing mainly on the issue of limitation. He contended that the central question was whether the High Court correctly held that the suit was time-barred. The learned counsel for the appellant submitted that, in assessing whether a suit is barred by time, the enquiry must commence from the date on which the cause of action arose. He drew the Court's attention to page 225 of the record of appeal and submitted that, the learned Judge erred in relying on excerpts from the appellant's submissions being mere arguments and not part of the pleadings in arriving at a conclusion as to the date of accrual. He further argued that the learned Judge fell into error in both fact and law by relying on proceedings in Customs and Excise Tax Application No. 3 of 2018, which took place after the seizure notice of 18thJanuary 2017. According to him, reliance on such material amounted to resorting to evidence in the course of determining a preliminary objection which was highly irregular at that stage. The learned counsel for the appellant further faulted the learned Judge for adopting a date derived from a witness and from the opinion of a member of the Tax Revenue Appeals Board (the Board) opinions generated after the impugned seizure while disregarding the accurate dates contained in the seizure notice itself, namely 17th and 18th January 2017, as pleaded in the plaint. It was his contention that the learned Judge arrived at an erroneous conclusion as to when the cause of action arose. Turning to ground nine, Mr. Kamala argued that the preliminary objection raised by the respondent was founded on evidence rather than on a pure point of law. He submitted that a preliminary objection must be based strictly on a point of law, citing Hezron Nyachiya v. Tanzania Union of Industrial and Commercial Workers Civil Application No. 79 of 2001 [2005] TZCA 66 (unreported), and Ibrahim Abdallah (Administrator of the Estate of the late Hamisi Mwalimu) v. Selemani Hamisi (Administrator of the Estate of the late Hamisi Abdallah), Civil Appeal No. 314 of 2020 (unreported), to emphasize that a preliminary objection presupposes the correctness of the facts pleaded by the opposite party. On this basis, he urged the Court to allow the appeal and set aside the High Court's ruling with costs. On the opposing side, Ms. Salah also opted to argue the grounds relating to limitation of time together. She submitted that the learned Judge rightly dismissed the suit for being time-barred. In her view, the preliminary objection turned solely on whether the suit was filed out of time, and thus the decisive issue was when the cause of action accrued. She argued that, upon examining the plaint and its annexures, the trial court correctly discerned the relevant dates. Upon being probed by the Court on whether the plaint expressly indicated the date of accrual of the cause of action, Ms. Salah conceded that, it did not. She nevertheless contended that the annexures were sufficiently instructive, particularly annexure A-14, being the proceedings and judgment of the Board in Customs and Excise Tax Application No. 3 of 2018. She elaborated that at page 4, paragraph 2 of annexure A-14, it is clearly stated that the appellant became aware of the alleged non payment of import duty and VAT on 9th January 2017 when the TRA notified it that the renewal of the trucks' licences could not proceed. As regards ground nine, the learned counsel for the respondent submitted that it had not been raised before the High Court and ought, therefore, to be disregarded. She further contended that, in any event, limitation constitutes a jurisdictional point of law which is properly addressed by way of a preliminary objection. She referred the Court to the case of Moto Matiku Mabanga v. Ophir Energy PLC & Others, Civil Appeal No. 199 of 2021 [2021] TZCA 599, to underscore that, in determining the question of limitation, the court must confine itself to the plaint and its annexures. She further relied on Babito Limited v. Freight Africa Belgium & Others, Civil Appeal No. 355 of 2020 [2023] TCA 17; Shoes Sinare v. Stanbic Bank Tanzania Ltd & Another, Civil Appeal No. 89 of 2020 [2021] TZCA 476; and Mukisa Biscuit Manufacturing Co. Ltd v. West End Distributors Ltd [1969] EA 696 to support her submisison. Ms. Salah concluded by urging the Court to dismiss the appeal with costs. In rejoinder, Mr. Kamala submitted that the proceedings relied upon by the High Court were insufficient to determine the preliminary objection. Consequently, he argued, no clear conclusion could be drawn as to when the cause of action arose given that annexure A-14 was unclear. He reiterated that the materials relied upon demanded further elucidation by the parties and through the reception of evidence and that the trial court's analysis rested on mere assumptions. Upon a careful consideration of the submissions and the entire record, it becomes apparent that the appellant takes issue with the High Court's determination upholding a preliminary objection on the ground that the suit was time-barred. The central issue before us, consistent with the stance taken by both counsel is whether, on the face of the pleadings alone, one can properly conclude that the appellant's suit was time barred. The parties took divergent positions on when the cause of action accrued. The appellant contends that the cause of action arose on 17th January 2017, when the trucks were seized, and the tax demand was issued, as stated in the plaint. Conversely, the respondent argues that the plaint does not expressly state the date when the cause of action arose, however, annexure A-14 clearly indicates that the appellant knew of the underlying complaint as early as 9th January 2017, thereby rendering the suit filed beyond the six-year limitation period. It is settled law that a pure point of law does not arise if there are contentions on facts yet to be ascertained by evidence. See Mukisa Biscuit Manufacturing (supra), Hezron M. Nyachiya v. Tanzania Union of Industrial and Commercial Workers and Another, Civil Appeal No. 79 of 2001, Karata Ernest and Others v. Attorney General, Civil Revision No. 10 of 2010 (unreported). In Mukisa Biscuit Manufacturing (supra), the defunct Court of Appeal for East Africa defined what constitutes a preliminary objection on a point of law, having said among other things, the following: " A prelim inary objection is in the nature o f what used to be a demurrer. I t ra ise s a p u re p o in t o f law , w hich is arg u ed on the assum ption th a t a ll th e fa cts p lead ed b y the o th e r sid e are correct. I t can n o t be ra ise d if an y fa c t h as to be a sce rta in e d o r if w hat is so u g h t is the e xe rcise o f ju d ic ia l d iscretion ". [Emphasis added] From the bolded expression, a preliminary objection may only be entertained where the facts, as pleaded, are undisputed and sufficiently clear to sustain the point of law. In the present case, the learned Judge upheld the objection on the basis of annexure A-14, which required investigation of facts. The date of accrual of the cause of action was not expressly stated in the plaint and the parties were disagreement on the matter. In addressing the point as to when the cause of action accrued, the learned Judge upheld the preliminary objection relying on the contents appearing at page 827 of the record of appeal, in the following terms: " Looking a t the above portion o f what the p la in tiff herein disclosed before the Board during its proceedings, I cannot held m y breath but agree with Mr. Nyika that the p la in tiff was aware o f the alleged breach rig h t from the 9 h January 2017 that certain duties in respect o f the trucks which he had purchased from the defendant were not paid and fo r that m atter the TRA had w ithheld the renew al o f the licenses because o f that issue. In 11 view o f that finding, it cannot be argued as Mr. Kam ala would like this court to believe that it was u n til when the p la in tiff was served with a form al notice and tax demands on I7 h January 2017 and the subsequent im pounding o f the trucks by the TRA. Those actions were done while the p la in tiff was already made aware o f the cause o f her troubles, the knowledge which she acquired on the 9 h January 2017 as per the annexure A-14". A close examination of the foregoing excerpt demonstates that the learned Judge could not properly determine the preliminary objection without venturing into matters of fact that were clearly in dispute, a course which is impermissible at the preliminary stage. In terms of Order XIV rule 3 of the Civil Procedure Code, the proper procedure required that, at the final pre - trial conference stage, the trial court, in consultation with the parties, should have framed an issue on time limitation for determination at the trial along with other issues of fact. This would have afforded the parties a proper opportunity to be heard on the matter. Only upon such determination would the trial court have been in a better position either to proceed with the determination of other issues or to conclude its determination on the question of time limitation. 12 In view of the foregoing, we are satisfied that the question of limitation in this matter raised factual issues incapable of being resolved as a pure point of law. See Ibrahim Abdallah (supra). We therefore find and hold that the preliminary objection was thus improperly and prematurely upheld. Consequently, we allow the appeal and hereby quash and set aside the impugned decision together with the order dismissing the suit. Going forward, we remit the case file to the High Court for trial on the merits before another judge. Costs shall abide the outcome of the suit. Order accordingly. DATED at DAR ES SALAAM this 10th day of December, 2025. L. J. S. MWANDAMBO JUSTICE OF APPEAL G. J. MDEMU JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL Judgement delivered this 11th day of December, 2025 in the presence of Mr. Paschal Kamala, learned counsel for the Appellant, Mr. Idrissa Juma Mghua, learned counsel for the Respondent and Stella Mlaponi, Court Clerk; is hereby certified as true copy of the original.