Ecobank Tanzania Limited vs Vehicle & Equipment Leasing (T) Limited & Others (Civil Appeal No. 63 of 2024) [2025] TZCA 972 (18 September 2025)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA fCORAM: MWANPAMBO, J.A., MWAMPASHI. 3,A. And MGEYEKWA, J.A.) CIVIL APPEAL NO. 63 OF 2024 ECOBANK TANZANIA LIMITED ......... . .................... . ................ APPELLANT VERSUS VEHICLE AND EQUIPEMENT LEASING (T) LIMITED . ........ . 1 st RESPONDENT PAUL N JERU ....................... . ........................................... 2 nd RESPONDENT WANG'OMBE GATHONDU................................................ 3 rd RESPONDENT VEHICLE AND EQUIPMENT LEASING (KENYA) LIMITED ... 4™ RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania (Commercial Division) at Dares Salaam) (Aqatho, L i dated the 22n d day September, 2023 in Commercial Case No. 112 of 2022 JUDGMENT OF THE COURT 29th July & 18th September, 2025 MWANPAMBO, J.A.: On 22 September 2022, the High Court (Commercial Division) sitting at Dar es Salaam dismissed a suit instituted by the appellant against the respondents jointly and severally in Commercial Case No. 112 of 2022 for failure to discharge her burden of proof to sustain it. Dissatisfied, the appellant has appealed to the Court against that decision. l

The facts behind the suit before the trial court and ultimately in this appeal are, largely common cause. To the extent they are material to this appeal, they can be set out in brief thus: Between April 2013 and November 2014, the appellant approved three credit facilities in favour of the first respondent involving different amounts in Tanzania Shillings (TZS) and United States Dollars (USD). Against the credit facilities, the first respondent placed several securities, particularly, personal guarantees of the second and third respondents and a corporate guarantee executed by the fourth respondent and Motor Vehicles Registration cards of the first respondent. In the course of that relationship, the first respondent defaulted in the discharge of its liabilities arising from the credit facilities which culminated into a negotiation for a loan restructuring settlement agreement (exhibit P7). Significantly, the appellant accepted the first respondent's repayment plan for a restructured outstanding liability of TZS 2,772,562,308.00 repayable in 43 monthly instalments of TZS 64,478,193.00 each, commencing from June 2019 ending on December 2022. It was also agreed that, failure by the first respondent to adhere to the terms of the settlement agreement would entitle the appellant to change the agreed terms at its own discretion. 2

The above notwithstanding, the first respondent allegedly defaulted in repayment of the agreed monthly instalments. All the same, the appellant did not exercise its discretion by changing the terms of that agreement upon the first respondent's non-adherence to terms of the Loan Restructuring Agreement. On 12 February 2021, the first respondent's loan account No. 7045001189 ("the account") reflected a credit entry of USD 1,000,000.00 shown to be resulting from inward transfer indicated in the electronic bank statement covering the period from 2014 to 12 February 2021. A month later, on 11 March 2021, to be exact, the appellant wrote a letter to the first respondent through its Head of Credit confirming that it (the 1s t respondent) had no outstanding liability from the credit facilities pursuant to an undisclosed arrangement in which, the appellant had accepted receipt of USD 1,000,000 as full and final payment of the outstanding liability from the credit facilities. That letter (part of exhibit P8) was followed by release of securities, that is motor vehicles registration cards to the first respondent by a letter dated 14 July 2021 signed by the appellant's Head of Credit and the Company Secretary. Ordinarily, the above would have closed the chapter between the parties in relation to the liability from the credit facilities. Disappointingly, that was not the case. On 26 May 2022, the appellant sent a letter to the first respondent a letter of its intention to rectify an error credit entry of 3

USD 1,000,000.00 reflected in the bank account statement upon discovering that the credit entry reflected in the account on 12 February 2021 was erroneous as it was allegedly made by mistake of fact. Through that letter (exhibit P9), the appellant retracted the previously issued loan clearance letter of 11 March 2021 allegedly because it was issued on an erroneous assumption that there was indeed a credit entry of USD 1,000,000.00 in the account which turned out not to be the case. The above notwithstanding, neither did the first respondent make any reaction against the notice for the reverse of the credit entry nor did it do so against the demands by the appellant through its advocates (exhibit P10) for payment of the outstanding loan liability after the reversal of the credit entry in the loan account. That resulted into the institution of the suit against the respondents jointly and severally for payment of the outstanding loan balances in the sum of TZS 6,308,813,844.00 and USD 1,620,798 interest thereon to the date of judgment, interest thereon and costs of the suit. In their joint defence, the respondents disputed the appellant's claims as baseless. Specifically, they averred in paragraphs 2 and 5 of the amended written statement of defence that, the appellant had disbursed only part of the proceeds from the approved credit facilities which had been fully repaid. They maintained that, they had discharged their 4

liabilities and were no longer indebted to the appellant upon her credit clearance followed by release of the securities. The trial court framed two issues for the determination of the suit namely; (1) whether the first respondent fully repaid the credit facilities and (2) what reliefs were the parties entitled to. We wish to observe at this juncture that, a credit facility once granted and proceeds from it disbursed, results into a loan liability. Accordingly, the first issue should have been whether the 1s t respondent fully discharged the liabilities under the credit facilities. On the other hand, in view of the respondents' averments in paragraphs two and five of the amended defence as hinted above, it is our view that, resolution of the issue on the outstanding liability immediately before the disputed credit entry of 12 February 2021 was crucial before determining the 1s t issue. The determination of the suit by the trial court was through the evidence of two witnesses for both the appellant and the respondents. The appellant had Emmanuel Shayo (PW1) by way of witness statement as his evidence in chief which was largely a replica of the averments in the plaint. He also tendered a number of documentary exhibit before answering questions in cross-examination during the hearing. The respondents similarly called one witness, one Paul Njeru (DW1) who, like 5

PW1, filed a witness statement and during the hearing tendered several documentary exhibits before standing for cross-examination. In a nutshell, the appellant's case before the trial court was premised on default in repayment of the loan under the credit facilities despite the credit clearance issued claimed to have been issued by mistake of fact as no payment had been paid by the first respondent which could have discharged the liabilities from the credit facilities. For their part, the respondents claimed to have discharged their liabilities of the amount disbursed and had no further liability by reason of the credit clearance letter issued by the appellant on 11 March 2021 followed by the release of the securities. By and large, the respondents relied on the bank statement attached to an email reflecting a credit entry of USD 1,000,000.00 on 12 February 2021 (exhibit D2), credit clearance letter dated 11 March 2021 (exhibit P8) notwithstanding the fact that the appellant had retracted from it claiming that the disputed credit entry on 12 March 2021 was erroneous because no money had been received. At the end of the hearing, the trial court found the appellant's evidence insufficient to discharge its burden of proof to be entitled to judgment on the reliefs claimed. The trial court supported its findings on several reasons that is to say; first, lack of evidence proving the error behind the alleged incorrect credit entry resulting in the credit clearance 6

letter on 11 March 2021 comprised in exhibit P8; second, lack of evidence proving lack of authority in the officer who signed the credit clearance letter considering PWl's evidence to the effect that the Head of Credit, shown to have signed the credit clearance letter was a senior officer reporting directly to the Managing Director; third, lack of explanation behind the delay in detecting the alleged incorrect entry taking as long as 14 months in communicating with the first respondent; and fourth, failure to tender a bank statement, forensic or audit investigation report proving that USD 1,000,000.00 was not paid into the account. Conversely, the trial court found the respondent's evidence in defence sufficiently displaced the appellant's case regardless of the absence of paper trail proving the credit entry through the appellant's own credit clearance letter, securities release letter comprised in exhibit P8 and extract of bank statement sent by the appellant's officer via exchange of email (exhibit D2). Having so reasoned, it dismissed the appellant's suit against which, the appellant has preferred the instant appeal on four grounds set out in the memorandum of appeal faulting the trial court for:

1. Requiring the appellant to prove a negative on the non-payment o f USD 1,000,000,00 by the respondents.

2. Alternatively, shifting the burden o f proof on whether the respondents paid USD 1,000,000.00 to the appellant

3. Failure to analyse the evidence thereby reaching at wrong findings that: a) the appellant failed to prove error or mistake o f a credit entry o f USD 1.000.000.00 contrary to the evidence on record that the respondents did not furnish supporting documents to prove payment o f USD 1,000,000.00 into the account b) the respondents proved payment o f USD 1.000.000.00 to discharge their liabilities with the appellant contrary to its finding that there was no paper trail to support the payment c) the appellant failed to prove the respondent's indebtedness despite admission thereof by DW1.

4. Relying on a problematic credit in the bank statement as proof o f actual payment contrary to the finding that the appellant had a right to correct errors made in a credit entry and that a problematic statement in itself cannot be retied upon to prove a debt or payment The learned advocates for the parties lodged their respective written submissions for and against the grounds of appeal ahead of the hearing supported by a list of authorities in support of their respective

standpoints. Ms. Samah Salah, learned advocate, appeared for the appellant at the hearing of the appeal whilst, Ms. Stella Modest Rweikiza and Mr. Dickson Ngowi, both learned advocates, teamed up to represent the respondents. Both Mses. Salah and Rweikiza made oral submissions to highlight on some aspects on their written submissions and authorities relied upon each urging the Court to determine the appeal in favour of her client. The appellant's counsel addressed the Court on the 1s t and 2n d grounds conjointly in her submissions. The two alternative grounds fault the trial court allegedly for requiring the appellant to prove a negative on whether the respondents had paid USD 1,000,000.00 in the account. It is contended that, in so doing, the court shifted the burden of proof from the respondents who were required to prove payment of the disputed amount in the account and not the appellant proving non-payment of that amount to clear the liabilities arising from the credit facilities. It is further contended that, since the appellant had retracted from the credit clearance letter dated 11 March 2021 issued mistakenly and reversed the erroneous credit entry, the burden proving that they paid the money into the first respondent's account was on the respondents themselves. Relying on the Court's decisions, in particular, Paulina Samson Ndawavya v. Theresia Thomas Madaha [2019] TZCA 453 and Dr. A. 9

Nkini & Associates Limited v. National Housing Corporation [2021] T7CA 73, counsel argued that, contrary to the trial court's findings, the appellant had no burden of proving that the first respondent had not paid the money. Rather, the party who claimed to have paid bore the burden consistent with the dictates of section 110 of the Evidence Act which casts burden of proof on a person who alleges existence of fact to prove such fact. In elaboration, the learned advocate asserted that, the trial court approached the issue wrongly in requiring the appellant to prove that the credit entry in question was indeed erroneous in the absence of any evidence from the respondents proving that they had actually paid the said amount. This is so, she argued, besides the retracted credit clearance letter dated 11 March 2021, the respondents adduced no other evidence to prove the credit entry as admitted by DW1 in cross examination on lack of paper trial in the form of swift or instruction for bank transfer to substantiate the disputed payment. It was thus argued that, on the authority of the Court's decision in Paulina Samson Ndawavya, the respondents did not discharge their burden of proof that the first respondent actually made any transaction in the account leading into disputed credit entry. Counsel maintained that, that was irrespective of the weakness in the appellant's case in relation to an erroneous credit 10

entry, credit clearance and delayed detection of the error coupled by absence of audit and investigation report on the fateful credit entry. With the foregoing, the Court was urged to allow the 1s t and 2n d grounds of appeal. In her submissions in reply, with deep conviction, Ms. Rweikiza invited the Court to dismiss the two grounds for being misconceived. She gave several reasons to argue that the trial court correctly found the appellant did not prove its case against the respondents. To begin with, counsel argued that contrary to the appellant's submissions, the respondents discharged their burden of proof of payment of USD 1,000,00.00 into the account owing to exhibit D2 comprising email correspondence between the officers of the appellant and first respondent supported by a bank statement attached thereto covering the period between 29 June 2018 to 12 February 2021. Besides, she pointed out that, the respondents proved that they fully discharged their liabilities through the appellant's own credit clearance letter and security release letter admitted in evidence as exhibit P8. According to the learned advocate, the respondents did not require further evidence to discharge their burden proof in view of the appellant's own admission that the first respondent had no further liability from the credit facilities upon the credit entry into the account. Counsel contended further that, with such li

evidence, there was no need for any paper trail let alone the fact that it was not pleaded by the appellant it being only raised during cross- examination. On the other hand, it was submitted that, having discharged their burden of proving that they fully discharged their liabilities under the credit facilities the burden shifted on the appellant to prove that exhibits D2 and P8 were issued by error or mistake which it failed to discharge. Placing reliance on Ndawavya's case, counsel argued that the appellant could not have discharged its burden of proof on the error or mistake relying on the absence of paper trail considering that the bank statement constituting exhibit D2 reflected the disputed credit of USD 1,000,000.00 into the account by inward transfer. Moreover, counsel argued that, had there been any error, it could not have taken so long to detect it in the absence of any audit report establishing the error. On this, counsel sought to reinforce her argument by Regulation 25 (1) and (2) of the Banking and Financial Institutions (Internal Control and Internal Audit) Regulations G.N. No. 286 of 2014 (the Regulations) made under section 71 of the Banking and Financial Institutions Act. The Regulation imposes obligation on banks and financial institutions to submit to the Bank of Tanzania, audit reports and minutes of audit committees or board of directors on quarterly basis. 12

The above argument notwithstanding, it was Ms. Saiah's submission in rejoinder that, since the appellant claimed that the documents indicating that the first respondent had fully discharged its liability to the appellant were issued under a mistake of fact, the first respondent was bound to prove not only payment of USD 1,000,000.00 on 12 February 2012 but also the arrangement under which the appellant agreed to be paid a lesser sum than the actual outstanding liability. The learned advocate argued with considerable force that, not only did the first respondent fail to furnish proof of payment of USD 1,000,000.00 through supporting documents as admitted by DW1 but also consideration for payment of that amount as full payment of the outstanding loan. For a start, we wish to state at this juncture that the issue involved in the appeal is admittedly unique. It involves the burden of proof in the set of facts in which the appellant who was the plaintiff before the trial court asserted a negative retracting its previous assurance to the first respondent on its loan liability whereas the latter relies on that assurance as the only evidence it had to discharge its burden of proof on the sole issue during the trial. Strikingly, the learned advocates relied on similar authorities in support of their standpoints on the burden of proof of the fact in issue before the trial court, but they had a sharp divide on their application to the issue. While we appreciate the energy and industry each 13

counsel invested in persuading us to agree with her, we cannot promise to refer to all of them as it will unfold in due course. It is common cause and the trial court was right that the respondents had the burden of proof in the first place on the issue whether they fully discharged their liabilities from the credit facilities extended to the first respondent. This became logical in view of the fact that the appellant's cause of action was anchored on default to discharge the liabilities from the credit facilities notwithstanding the loan restructuring agreement (exhibit P7) in which the first respondent agreed to repay the outstanding loan in the sum of TZS 2,772,562,308.00 in 43 monthly instalments of TZS 64,478,193 each, commencing from June 2019 ending on December 2022. It will be recalled that the appellant alleged that, the first respondent only paid TZS 10,000,000.00 out of the agreed amount. Despite this, the respondents made an evasive denial on this without more. That means, the burden of proof that the respondents fully discharged their liability under the credit facilities must be viewed from that perspective. Relying on exhibits P8 and D2, the trial court was satisfied that that was sufficient evidence to prove that the respondents had fully discharged their liabilities without the need for any other evidence considering that the appellant did not explain away the error 14

behind the disputed credit entry into the account as well as the credit clearance that followed and retracted belatedly through exhibit P8. As seen above, Ms. Salah's submission has maintained that it was not enough for the trial court to rely on exhibits P8 and D2 as basis for its finding that the respondents had discharged their burden of proof on the fact in issue without any supporting documents proving that fact owing to the fact that the appellant had already reneged from the credit clearance. Despite Mrs. Rweikiza's conviction that no supporting paper trail was required owing to the appellant's own admission, we are unable to go along with that submission being satisfied that proof of payment could have been simply through the appellant's documents without more in the circumstances of the instant appeal. All things being equal, the appellant's exchange of communication through exhibits P8 and D2 confirming that the first respondent had discharged her liabilities would have been conclusive evidence of the fact that the first respondent had no further liability arising from the credit facilities. However, the position here is different. Despite the confirmation that the first respondent had no further liability from the credit facilities owing to the credit entry of USD 1,000,000.00 followed by a credit clearance letter and release of securities, belatedly as it was, the appellant reneged from the confirmation vide exhibit P8. It is striking that, the first respondent was 15

not bothered by the notice of intention to reverse the credit entry, as it made no response thereto by furnishing proof of payment by paper trail. Neither did it make any reply to the subsequent demand notices from the appellant's advocates through exhibit P10 prior to the institution of the suit. With respect, relying on the same set of documents the appellant had retracted as the only basis for her evidence of payment of USD 1,000,000.00 is, but flawed. In our view, the respondents had more to do by furnishing proof of payment of the disputed amount and corroborate it with the appellant's communications. One will be left wondering and justifiably so in our view, if the first respondent had indeed paid the amount. It is not clear to us what interest did the first respondent have by withholding such vital evidence to prove the payment amidst persistent demands from the appellant which risked a court action for recovery as it were. Irrespective of DWl's admission on the lack of paper trail to prove payment, Mrs. Rweikiza would have us agree with her that it was not necessary and an afterthought because it was not pleaded. However, we have already taken the view that the paper trail was necessary in the circumstances of the case to prove the payment. That aside, contrary to the respondents' learned advocate, it was not for the appellant to plead 16

lack of paper trail to be brought in cross-examination but rather, the party claiming that payment had been made to substantiate her claim. Apparently, the respondents have been economical on any paper trail leading to the disputed credit entry. Besides, counsel's argument downplaying DWl's admission on the absence of paper trail as inconsequential and an afterthought is equally flawed. The learned advocate seems to have little appreciation behind the purpose of cross examination that is, to contradict and damage the opponent's case and build the case for the party cross-examining. That is exactly what the appellant did by extracting admission from DW1 regarding lack of paper trail through cross-examination. It has not been suggested that paper trail was not a relevant piece of evidence to prove the fact in issue and thus, the respondents cannot be allowed to denounce their own evidence which, as we have already said, was crucial to the proof of payment of the disputed amount rather than relying on exhibit P8 which it subsequently retracted. Furthermore, while conceding weakness in the manner the appellant's officers confirmed to the first respondent on the liability, Ms. Salah argued that, that notwithstanding, upon the appellant's letter (exhibit P9), the respondents were bound to prove the arrangement through which the appellant discharged the first respondent from the 17

liability under the credit facilities. In our view, in the absence of the arrangement for payment of a lesser amount of the outstanding liability as agreed under the loan restructuring agreement, the respondents' mere assertion could not have sufficed to support the trial court's finding that they discharged their burden of proof on the main issue before the trial court. Ms. Rweikiza's argument on the failure by the appellant to prove subsequent events of error and mistake of fact relying on the trial court's finding disregards the fact that, the primary fact in issue was whether the respondent discharged their liabilities under the credit facilities on which, the burden of proof lay on the respondents. As stated above, the respondents could not rely solely on the appellant's documents which were merely corroborative of their evidence of payment of not only the disputed amount of USD 1,000,000.00 but also the arrangement behind the appellant discharging them from the outstanding liability of TZS 2,772,562,308.00 plus interest less TZS 10,00,000.00 the appellant admitted that it had been paid. In the absence of evidence of such payment as well as the arrangement, proof of mistake of fact was inconsequential since it was dependent upon the respondent's proving payment which they did not. 18

Owing to the foregoing, while we appreciate the authorities cited to us by Mrs. Rweikiza on the burden of proof we are of the view that, apart from stating the law, they do not support the respondents' case in this appeal. For instance, in Barelia Karangirangi v. Asteria Nyalambwa [2019] TZCA 51, the Court considered, amongst others, the phrase, balance of probabilities as defined in Re B [2008] UKHL 35, quoted with approval in Anthony Mganga v. Penina (Mama Mgesi) and Another, [2015] TZCA 556 thus: "If a legal rule requires a fact to be proved (a 'fact in issue’ ), a judge or jury must decide whether or not it happened. There is no room for a finding that it might have happened. The law operates a binary system in which the only values are 0 and

1. The fact either happened or it did not I f the tribunal is left in doubt the doubt is resolved by a rule that one party or the other carries the burden o f proof. I f the party who bears the burden o f proof fails to discharge it, a value o fO is returned and the fact is treated as not having happened. I f he does discharge it, a value o f 1 is returned and the fact is treated as having happened . " Applying the above to this appeal, the fact in issue before the trial court was whether the respondents discharged their liabilities in which, the burden of proving that indeed they did, lay on the respondents. As we 19

have discussed above, the respondents did not prove that the first respondent did indeed discharge the liability. It was not for the appellant to prove that they did. The same applies to The Registered Trustees of Joy in Harvest v. Hamza K. Sungura [2021] TZCA 139 citing Ndawavya's case on who bears the burden proof; a party who asserts the affirmative and not the one who asserts a negative. As submitted by Ms. Salah, since the appellant asserted a negative on the default by the first respondent to discharge its liabilities from the credit facilities, the burden of proof lay on the respondent who asserted the affirmative regardless of the weakness in the appellant's case. Interestingly, in its decision in Registered Trustees of Joy in Harvest, relied on by the respondent's advocate, the Court referred to a passage by Lord Hoffman in another case in Secretary of State for the Home Department v. Rehman [2001] UKHL 47 which we find relevant in the issue under consideration. We shall have Lord Hoffman speak for himself as follows: "It would need more cogent evidence to satisfy [a judge] that the creature seen walking in Regent's Park was more likely than not to have been a lioness than to be satisfied to the same standard o f probability that it was an Aisatian." In the same vein, it will require more cogent evidence to satisfy ourselves that the respondents discharged their liabilities in full from the 20

credit facilities merely by looking at the retracted documents in the absence of independent evidence supporting the payment from the respondents themselves who asserted that they did. For the sake of completeness, we shall briefly address the reference to regulation 25 (1) and (3) of the Regulations which Mrs. Rweikiza impressed us to agree with her that payment of USD 1,000,000.00 was indeed made. With unfeigned respect, the reliance on the regulation does not make the respondents' case any better. In our view, whether or not the appellant complied with the Regulation by way of any audit report or forensic audit is a matter within the competence of the Regulator; the Bank of Tanzania to impose the appropriate sanctions which has nothing to do with the respondents' burden proving that they discharged their liabilities under the credit facilities. It could not have supported the respondents' case in the manner submitted by their learned advocate. In the upshot, we find merit in the two alternative grounds and hold that the trial court strayed into error in finding as it did that the respondents fully discharged their liabilities under the credit facilities without any evidence to that effect. Our determination in the first two grounds makes it unnecessary for us to belabour on the 3rd and 4th grounds which have now been rendered superfluous. 21

In the tight of the foregoing, we find merit in the appeal and allow it. Consequently, the judgment and decree of the trial court dismissing the suit are hereby quashed and substituted with judgment for the appellant. Nevertheless, although the appellant prayed for payment of TZS 6,308,813,844.00 and USD 1,620,798.00 as outstanding amounts on account of the credit facilities, PW l's evidence is not satisfactory taking into account the fact that the bank statement which could have been conclusive proof of the indebtedness was not tendered in evidence. The only evidence on the outstanding amount was through the agreed repayment plan (exhibit P6) and loan restructuring agreement exhibit P7 showing TZS 2,772,562,308.00 as the agreed settlement amount as of June 2019 agreement, which superseded the banking facilities dated 19 April 2014, 5 November 2014 and 13 May 2014. In his evidence during re- examination, PW1 admitted that, the first respondent had already paid TZS 600,000,000.00 out of the settlement amount. PW1 admitted also in cross-examination that notwithstanding the default in repayment in accordance with the repayment plan, the appellant did not exercise its discretion by changing the terms in pursuance of clause l(v) of exhibit P7. That means, the outstanding liability stood at TZS 2,172,562,308.00 and not the amount claimed in the plaint. 22

Consequently, there will be judgment for the appellant in that sum with interest at the rate of 7% per annum from 22 September 2022 till payment in full. The appellant shall have its costs here and in the High Court. DATED at DODOMA this 17th day of September, 2025. The Judgment delivered virtually this 18th day of September, 2025 in the presence of Ms. Samah Salah, learned Advocate for the appellant, Ms. Stella Rweikiza, Mr. Dickson Johnson, both learned advocate for the Respondent and Ms. Hilda Mcharo, Court Clerk, is hereby certified as a true copy of the original. L. J. S. MWANDAMBO JUSTICE OF APPEA A. M. MWAMPASHI JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL D. R. LYIMO DEPUTY REGISTRAR COURT OF APPEAL 23