Armstrong Nico Jerry & Skymax Elevators Limited vs International Commercial Bank (T) Limited & Others (Civil Appeal No. 914 of 2024) [2025] TZCA 1228 (28 November 2025)

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA (CORAM: NDIKA, J.A., FIKIRINI, J.A.. And MGEYEKWA. J .A .l CIVIL APPEAL NO. 914 OF 2024 ARMSTRONG NICO JERRY...................................................1 st APPELLANT SKYMAX ELEVATORS LIMITED.............................................2 nd APPELLANT VERSUS INTERNATIONAL COMMERCIAL BANK (T) LIMITED ........... 1 st RESPONDENT MBUZAX AUCTION MARTAND COMPANY LIMITED ............ 2 nd RESPONDENT CATHERINE ARNOLD MOSHIRO........................................3R DRESPONDENT (Appeal from the Ruling of the High Court of Tanzania at Dar es Salaam) (Mwaipopo, J.) dated the 24th day of April, 2024 in Land Case No. 28583 of 2024 JUDGMENT OF THE COURT 10th & 28th November, 2025 FIKIRINI. 3.A.: Aggrieved by the High Court's ruling in Land Case No. 28583, delivered on 24th April, 2024, the appellants, Armstrong Nico Jerry and Skymax Elevators Limited, the 1s t and 2n d appellants respectively, appealed to this Court. The dispute between the appellants and International Commercial Bank (T) Limited, the 1s t respondent, culminating in the present appeal, i had the following history. The 2n d appellant, a corporate entity, was advanced a loan facility of TZS 210,000,000/=. To secure repayment of the loan, the 1s t appellant mortgaged his landed property registered under CT No. 80902, Plot No. 1384, Block "A", Kinyerezi Area, Ilala Municipality, Dar es Salaam. Upon default by the 2n d appellant, the matter was initially brought before the High Court as Land Case No. 99 of 2021. The parties subsequently executed a Deed of Settlement on 3rd December, 2021, which provided that in the event of further default, the mortgaged property would be disposed of either by private sale or public auction. The 2n d appellant again failed to honour the settlement terms, prompting the 1s t respondent to instruct the 2n d respondent, a court broker, to conduct a public auction. The auction was held on 15th July 2023, at which the 3rd respondent emerged as the successful bidder. The appellants, dissatisfied with the manner in which the auction was conducted, alleged that the process was marred by fraud and irregularities. They instituted Land Case No. 28583 of 2023, seeking nullification of the auction because the highest bidder had fraudulently obtained it. 2 Before the hearing of the subsequent suit could commence, the 1s t respondent raised preliminary objections, one of which was that the matter was res judicata. The trial Judge sustained the objection, holding that Land Case No. 28583 of 2023 was res judicata to Land Case No. 99 of 2021, and dismissed the suit accordingly. Aggrieved by the ruling, the appellants lodged the present appeal, advancing four grounds which, in essence, challenge the High Court's finding of res judicata. The appellants complain that:- 1. The trial Judge erred in law and fact by holding that the subsequent suit was challenging recovery measures, whereas in truth it was challenging the legality of the auction process. 2. The trial Judge erred in holding that the parties in both suits were litigating under the same title, which was not the case. 3. The trial Judge erred in finding that the parties were the same in both suits, despite the fact that the 2n d and 3r d respondents were not parties to Land Case No. 99 of 2021. 4. The trial Judge erred in concluding that Land Case No. 28583 of 2023 was res judicata to Land Case No. 99 of 2021. 3 During the hearing, Messrs. Isack Nassor Tasinga and Ferdinand Makore appeared for the appellants, while Mr. Eustace Rwebangira appeared for the 1s t and 2n d respondents and Mr. Joseph Assenga for the 3r d respondent. The counsel for the appellants and 3rd respondent had filed written submissions in terms of rule 106 (1) and (7) of the Tanzania Court of Appeal Rules, 2009 (the Rules). They thus prefaced their oral submission by adopting them as part of the oral submissions for and against the appeal. Mr. Rwebangira, did not file any, so he relied on his oral submissions. Submitting on behalf of the appellants, Mr. Makore, argued that the criteria for res judicata were not satisfied. They argued that Land Case No. 99 of 2021 concerned recovery measures, whereas Land Case No. 28583 of 2023 concerned the mishandling of the auction process. He emphasized that fraud was pleaded in the subsequent suit, and under section 145 (3) of the Land Act, Cap. 113 R.E. 2023, fraud allegations permit suits against a purchaser who would otherwise be protected as a bona fide purchaser. Furthermore, the learned counsel contended that the parties were not identical in both suits, since the 2n d respondent (the court broker) and the 3rd respondent (the purchaser) were not parties to the earlier case. They also argued that the respondents failed to annex a copy of the former case to substantiate the plea of res judicata. On the other hand, Mr. Rwebangira, counsel for the 1s t and 2n d respondents, reiterated his submissions he made before the High Court, maintaining that the subsequent suit was barred by res judicata. They argued that the auction process formed part of the recovery measures, and therefore, the cause of action was the same. They further submitted that even if the Court were to find that the matter was not res judicata, the suit should still be struck out for failure to join the Commissioner for Lands. Mr. Assenga, counsel for the 3r d respondent, supported this position, contending that the term "recovery measures" was broad enough to encompass the auction process. He urged the Court to dismiss the appeal. Having carefully considered the submissions of both parties, the central issue before us is whether the High Court was correct in holding that Land Case No. 28583 of 2023 was res judicata to Land Case No. 99 of 2021. 5 The appellants' counsel invited this Court to consider section 145 (3) of the Land Act, Cap. 113 R.E. 2023, which permits an action to be brought where there is cause for alarm that a public auction was marred with fraud. He argued that the subsequent suit was not a challenge to recovery measures per se, but instead to the auction process, which was allegedly tainted with fraud. He further distinguished the case of Zuberi Paul Msangi v. Mary Machui (Civil Appeal No. 316 of 2019) [2022] TZCA 653, contending that the parties and subject matter in the present suit were not the same as in the earlier proceedings. The respondents, on the other hand, maintained that the auction was part of the recovery measures envisaged in the Deed of Settlement, and therefore the subsequent suit was barred by res judicata. The doctrine of res judicata is well established both in common law and under our statutory framework. According to Black's Law Dictionary, Ninth Edition, res judicata is: "an affirmative barring the same parties from litigating a second lawsuit in the same claim ; or any other claim arising from the same transaction or series o f transactions and that could have been raised but was not raised in the suit " 6 In Tanzania, the doctrine is codified under section 9 of the Civil Procedure Code, Cap. 33 R.E. 2023 (the CPC), which provides: "No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties or between parties under whom they or any o f them claim litigating under the same title in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised and has been heard and finally decided by such court." The objective of the doctrine is twofold: first, to ensure finality of litigation and prevent multiplicity of suits; and second, to protect parties from double jeopardy by being vexed twice over the same cause. As propounded in Peniel Lotta v. Gabriel Tanaki and Others [2003] T.L.R. 312, the conditions for res judicata must be cumulatively satisfied: 1. The matter in the subsequent suit must have been directly and substantially in issue in the former suit. 2. The former suit must have been between the same parties or privies. 3. The parties must have litigated under the same title. 4. A competent court must have heard the former suit. 5. The matter must have been heard and finally decided. On the first condition, whether the matter in issue in the subsequent suit was directly and substantially in issue in the former suit, the appellants argue that Land Case No. 28583 of 2023 challenged the auction process, alleging fraud, whereas Land Case No. 99 of 2021 concerned recovery measures. The respondents counter that the auction was part of the recovery measures envisaged in the Deed of Settlement, and therefore the subject matter was the same. We note that the Deed of Settlement (annexed as J-3) expressly provided that upon default, the 1s t respondent could proceed with the disposal of the mortgaged property by auction. The appellants defaulted, and the 1s t respondent exercised this right. The subsequent suit arose directly from this auction. Since the record of appeal before us contained limited information, with no proceedings from Land Case No. 99 of 2021 save for the Deed 8 of Settlement annexed to the plaint, we cannot say with certainty what transpired in full. The appellants' counsel raised a similar complaint. Still, we do not fully support him, since he, too, had an obligation to bring those proceedings to assist the Court in determining whether the subsequent suit was res judicata. Pleadings and decisions in the former case play a vital role in such determination. Nevertheless, relying on the information available, we reviewed clause 9 of the Deed of Settlement signed by the parties. In that agreement, the 2n d appellant expressly undertook not to file any further proceedings on the same issue in any court of law. Aside from the above, we are aware that a consent judgment may be challenged, but only on grounds of fraud. The situation envisaged in the appellants' case could not be remedied by lodging a subsequent suit. The appropriate avenue for the appellants to resort to is section 38 (1) and Order XXI Rule 88 (1) of the Civil Procedure Code, which deals with questions arising in the execution of a decree. Order XXI Rule 88 (1) provides thus:- "Where any immovable property has been sold in execution o f a decree > the decree holder, or any person entitled to share in rateable distribution o f assets, or whose interests are affected by the sale, may apply to the court to set aside the sale on the ground o f a material irregularity or fraud in publishing or conducting it "[Emphasis added] In Badugu Ginning Co. Ltd v. CRDB Bank Pic & 2 Others, (Civil Appeal No. 265 of 2019) [2021] TZCA 158 (3 May 2021; TANZLII), the Court faced a similar scenario where a borrower challenged the auction process after defaulting on repayment. The Court held that such a subsequent suit was barred by res judicata, as the auction was a direct consequence of the recovery measures agreed upon. Applying the same reasoning here, we find that the matter in the subsequent suit was directly and substantially in issue in the former suit. The appellants' claim that the auction was tainted with fraud does not, in itself, create a wholly distinct cause of action, as the auction was part of the recovery process contemplated in the earlier proceedings. We therefore hold that the first condition of res judicata is satisfied. The subsequent suit arose from the same transaction, the loan recovery secured by the mortgaged property and was directly connected to the Deed of Settlement concluded in Land Case No. 99 of 2021. 10 Turning to the second condition, the appellants argue that the subsequent suit involved different parties, namely the 2n d respondent (the court broker) and the 3rd respondent (the purchaser), who were not parties to Land Case No. 99 of 2021. The respondents counter that the core parties are the appellants and the 1s t respondent, who remained the same, and the additional parties were privies whose involvement flowed directly from the enforcement of the Deed of Settlement. We agree with the respondents that the inclusion of the court broker and the purchaser does not alter the essential identity of the parties. The court broker acted under the authority of the 1s t respondent, and the purchaser acquired rights through the auction conducted pursuant to the Deed of Settlement. Both are privies to the 1s t respondent's enforcement of its rights. Thus, the second condition is satisfied. Coming to the third condition, the appellants submit that the parties in the subsequent suit were not litigating under the same title, since the later case was framed as a challenge to fraud in the auction process. We, however, are of a different view and essentially support the respondents, who contend that the title under which the parties litigated in both suits was the same: the appellants as li mortgagors/guarantors seeking to protect their property, and the 1s t respondent as mortgagee enforcing its security. The addition of the broker and purchaser does not change the fundamental titles under which the parties litigated. This condition is met. Under the fourth condition, there is no dispute that the High Court (Land Division) was competent to try both suits. This condition is clearly satisfied. Lastly, under the fifth condition, the suit must have been determined conclusively; as per the record of appeal, Land Case No. 99 of 2021 was concluded by a Deed of Settlement, which was adopted as the final decree of the High Court. The settlement expressly provided for the disposal of the mortgaged property upon default. The appellants defaulted, and the 1s t respondent exercised its rights accordingly. The matter was therefore finally determined by a competent court. This condition is satisfied. Having tested each of the five conditions, we find that they are cumulatively satisfied. The subsequent suit, Land Case No. 28583 of 2023, arose from the same transaction and was directly connected to the enforcement of the Deed of Settlement concluded in Land Case No. 12 99 of 2021. The appellants' attempt to distinguish the auction process as a separate cause of action fails, as the auction was an integral part of the recovery measures contemplated in the earlier proceedings. While the appellants invoked section 145 (3) of the Land Act to argue that fraud allegations permit a fresh suit, we note that the situation in the present appeal did not call for the filing of a fresh suit. Instead, the appellants' remedy was to lodge an application challenging the shortfalls of the said execution in terms of section 38 (1) and Order XXI Rule 88 (1) of the Civil Procedure Code, which deal with questions arising in execution of a decree. Even though, there was a claim of fraud, it was not sufficient to displace the bar of res judicata, given that the auction was a direct consequence of the earlier Deed of Settlement, which led to the auction carried out in a recovery measure. We therefore hold that the High Court was correct in concluding that Land Case No. 28583 of 2023 was res judicata to Land Case No. 99 of 2021, albeit incorrect in dismissing the suit rather than striking it out. See:-Ngoni Matengo Cooperative Marketing Union Ltd v. Alimohamed Osman [1959] E.A. 577. The appeal is hereby dismissed in its entirety with costs and the ruling and order of the High Court dated 24th April 2024 is upheld. DATED at DAR ES SALAAM this 27th day of November, 2025. G. A. M. NDIKA JUSTICE OF APPEAL P. S. FIKIRINI JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL Judgment delivered this 28th day of November, 2025 via virtual Court in the presence of Mr. Ferdinand Makore, learned counsel for the Appellant, Mr. Thomas Rwebangira, learned Counsel for the 1s t and 2n d Respondents also holding brief for Mr. Joseph Asenga, learned advocate for the 3rd Respondent and Ms. Janekisa Bukuku, Court Clerk is hereby certified as a true copy of