Justus Ntibandetse vs CRDB Bank Plc (Civil Appeal No. 476 of 2023) [2025] TZCA 1221 (28 November 2025)

IN THE COURT OF APPEAL OF TANZANIA AT ARUSHA ( CORAM: NDIKA. J.A., FIKIRINI. J.A.. And MGEYEKWA. J.A.^ CIVIL APPEAL NO. 476 OF 2023 JUSTUS NTIBANDETSE...................................................................APPELLANT VERSUS CRDB BANK PLC ......................................................................... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania at Moshi) (Mkapa, J.) dated the 25th day of August, 2021 in DC Civil Appeal No. 4 of 2021 JUDGMENT OF THE COURT 5th & 28th November, 2025 FIKIRINI. 3.A.: The appellant, Justus Ntibandetse, was advanced a loan of TZS 100.000.000/= by the respondent, CRDB Bank Pic, in 2015 as working capital for his barley farming project. While part of the loan was serviced, a balance of TZS 83,000,000/= remained outstanding. Subsequently, the appellant obtained an additional loan of TZS 50.000.000/=. To secure the loans, the appellant pledged his matrimonial house situated at Arusha, LO 171946, Plot No. 298/B, Block "J", Njiro. i In addition to the pledged security, the appellant averred that the Private Agricultural Sector Support Trust (PASS) orally agreed to guarantee repayment of the loans in case of default and assured him that it would cover any losses. However, there was no evidence supporting this assertion. Ultimately, the appellant failed to service the loan, attributing his default to adverse weather conditions, specifically drought, which led to a failed harvest. This did not amuse the respondent, who promptly initiated recovery measures. In response, the appellant instituted a suit in the Resident Magistrate's Court of Moshi, registered as Civil Case No. 17 of 2019, seeking declarations that the respondent's claims were unlawful, an injunction against interference with the matrimonial home, and costs. He argued that PASS had settled the debt, rendering the respondent's actions invalid. At the trial, the appellant summoned four witnesses, including himself: Justus Ntibandetse (PW1), Immakulata Daniel Mawhela (PW2), Papias Peter Ndilanomba (PW3) and Norbert Malihela (PW4). He also tendered two documents: Exhibit PI - a letter notifying the respondent of weather conditions and Exhibit P2 - the appellant's bank statement. 2 In his testimony, the appellant attributed the drought that led to a poor harvest as the reason for his failure to repay the loan; the assertion corroborated by three other witnesses summoned. They also supported the appellant's account that PASS had acted as a guarantor. However, under cross-examination, the appellant conceded that he was not a party to any agreement between the respondent and PASS. Besides, he possessed no documentary evidence establishing PASS'S obligation to repay the loan on his behalf or being aware of the specific terms or conditions of any such guarantee. On the respondent's side, DW1 and DW2 testified that the Credit Guarantee Agreement (Exhibit D5) executed was solely between the respondent and PASS. Its purpose was to mitigate the bank's lending risk to under-collateralized farmers. Essentially, the agreement did not absolve borrowers such as the appellant from their repayment obligations. PASS'S role was limited to covering a portion of the loss, and only after the bank had exhausted recovery measures against the borrower. After evaluating the testimonies and exhibits, the trial court entered judgment in favour of the respondent, holding that: a valid loan agreement existed between the appellant and the respondent, of which the appellant's obligation to repay the loan existed undischarged. The 3 trial court dismissed the unfounded claim that PASS guaranteed repayment of the loan, thereby exonerating the appellant. The trial court concluded that the alleged agreement was between the respondent and PASS, excluding the appellant. The appellant unsuccessfully appealed to the High Court. The appeal was dismissed, and the trial court's findings were upheld. The High Court reiterated the doctrine of privity of contract under the Law of Contract Act (Cap. 345 R.E. 2019), noting that the appellant, as a stranger to the PASS and the respondent agreement, could not enforce or benefit from it without proof. No evidence was adduced that PASS had fully discharged the debt or waived the appellant's liability. Undeterred, the appellant has now lodged a second appeal, raising four grounds, which are rephrased as follows: 1. That, the High Court Judge failed to re-evaluate the evidence arriving at erroneous decision. 2. That, the High Court Judge failed to analyse the evidence of the appellant against that of the respondent. 3. That, the High Court Judge misapplied the principle of privity of contract and, as a result, arrived at an erroneous decision. 4. That, the High Court Judge failed to find that the trial court incorrectly applied the provisions of the applicable law, leading to an erroneous decision. During the hearing, Mr. Elidaima Mbise, learned advocate, appeared for the appellant, while Mr. Goodwill Nyaisa, also learned advocate, appeared for the respondent. Both counsel adopted their earlier written submissions filed on 13th July, 2023 and 16th August, 2023. Having thoroughly considered the submissions, which though not reproduced here, shall be taken into account in the determination of this appeal. Our scrutiny of the four grounds of appeal reveals that they fall into two broad categories. The first and second grounds both concern the manner in which the evidence was jointly evaluated, and for that reason, they will be addressed together. The third and fourth grounds, on the other hand, raise questions of law. They challenge the legal principles applied and the manner in which they were interpreted. Since both grounds relate to legal issues, they too shall be examined jointly. Starting with the 1st and 2n d grounds on re-evaluation and analysis of evidence. The appellant alleges that the High Court erred by failing to re-evaluate the evidence in relation to the grounds of appeal and by 5 neglecting to analyze the appellant's evidence against that of the respondent, thereby arriving at an erroneous judgment. A review of the record of appeal shows that the High Court Judge meticulously reviewed the trial proceedings, exhibits, and submissions. The judgment explicitly references key testimonies that he was not a party to the agreement entered into between PASS and the respondent, warranting him to know PASS'S repayment obligations. The above also includes the absence of documentary proof that PASS had settled the debt. On the contrary, DW2's explanation that Exhibit D5 (Credit Guarantee Agreement) was a risk-sharing arrangement between the bank and PASS contained no clause exonerating borrowers. Therefore, we concur with the concurrent two lower courts' finding that the appellant failed to discharge his burden of proof. Under Sections 110-112 (now 119-121) of the Evidence Act (Cap. 6 R.E. 2023), the burden lies on him to prove facts alleged, such as PASS'S guarantee extending to complete discharge of liability. His witnesses (PW2-PW4) merely offered hearsay regarding PASS'S role, without substantiating payment or exemption. By contrast, the respondent's evidence, including bank statements (Exhibit P2) showing outstanding balances and the guarantee terms (Exhibit D5), remained uncontroverted. 6 The High Court's analysis was balanced and thorough, correctly concluding that the appellant's claims were unsubstantiated. This was not erroneous but rather a proper exercise of first appellate court discretion, consistent with precedents such as Peters v. Sunday Post Ltd. [1958] E.A. 424, which caution appellate courts against interfering with the concurrent trial courts' findings in the absence of manifest error, including non-direction or misdirection. See also: Salum Mhando v. R [1993] T.L.R 170 and Deemay Daati & 2 Others v. R, (Criminal Appeal No. 80 of 1994) [2004] TZCA 41 (5 October 2004;TANZLII). We do not find any reason to step into the first appellate court's shoes, in the absence of any shortcoming or evidence that the first appellate court abdicated its duty of re-evaluation of evidence, which it was called to do. Grounds 1 and 2, therefore, fail. Turning to the 3rd and 4th grounds, the appellant contends that the High Court misapplied the principle of privity of contract under the Law of Contract Act, leading to an erroneous judgment. The doctrine of privity of contract, enshrined in Section 2 of the Law of Contract Act, provides that only parties to a contract can enforce or be bound by its terms; strangers cannot claim benefits or obligations thereunder. The High Court correctly applied this principle, noting that 7 Exhibit D5 was executed solely between the respondent and PASS in June 2014 to facilitate lending to under collateralized farmers. The appellant admitted he was not involved in, nor aware of, its specifics. He therefore could not invoke it to claim debt settlement or exemption from repayment. The trial court similarly found no term in Exhibit D5 excluding the appellant from liability post-PASS intervention. PASS's role was limited to reimbursing the bank for partial losses after borrower recovery efforts, not to absolve borrowers. This aligns with established common law authorities, including: Tweddle v. Atkinson [1861] EWHC J57 (QB), emphasizing that beneficiaries must be parties to enforce contracts. The position was later reiterated in Dunlop Pneumatic Tyre Co. Ltd v. Selfridge & Co. Ltd [1915] AC 847, where the House of Lords held that a third party cannot enforce contractual terms to which it is not a party. This position is consistent with the Court's pronouncement in China International Telecommunication Construction Corporation v. Betam Communications Tanzania Ltd & Others (Civil Appeal No. 1168 of 2024) [2025] TZCA 963 (TANZLII), where the Court reaffirmed that only parties to a contract may enforce it. See also Austack Alphonce Mushi v. Bank of Africa Tanzania Ltd & 8 Another (Civil Appeal No. 373 of 2020) [2021] TZCA 521 (TANZLII) and Scova Engineering S.p.A & Another v. Mtibwa Sugar Estates Limited & 3 Others (Civil Appeal No. 133 of 2017) [2021] TZCA 74 (12 March 2021; TANZLII). It is therefore our finding that the High Court's application of the doctrine of privity of contract was correct, justified and rightly dismissed the appellant's contention on this ground. The local jurisprudence further supports the High Court decision that the appellant's reliance on an alleged oral guarantee is equally untenable. The claim lacked evidentiary support and could not override the written loan agreements (Exhibits D1-D4), which imposed direct repayment obligations on him. An oral agreement cannot contradict documentary evidence. See: Tanzania Ports Authority & Another v. Kabeza Multi Scrapper Ltd & Another (Civil Appeal No. 72 of 2022). It is therefore our finding that the High Court's application of the doctrine of privity of contract was both correct and justified in law. The principle that only parties to a contract may enforce its terms has long been recognized, and the High Court's reliance on it was proper. Accordingly, the 3rd and 4th grounds are devoid of merit. 9 The lower courts' decisions stand firmly on both evidence and law. Consequently, we find all four grounds of appeal are meritless, leading to the dismissal of the entire appeal with costs. DATED at DAR ES SALAAM this 27th day of November, 2025. Judgment delivered this 28th day of November, 2025 via virtual in the presence of the appellant in person - unrepresented, Mr. Dennis Mworia, learned counsel holding brief for Mr. Godwin Nyaisa, learned counsel for the Respondent and Ms. Janekisa Bukuku, Court Clerk is hereby certified as a true copy of the original. G. A. M. NDIKA JUSTICE OF APPEAL P. S. FIKIRINI JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL 10