Fauz Suleiman Salum vs National Housing Corporation (Civil Appeal No. 403 of 2020) [2025] TZCA 881 (27 August 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM (CORAM: MWARIJA. J.A.. MGEYEKWA. J.A. And MLACHA. J.A.l CIVIL APPEAL NO. 403 OF 2020 FAUZ SULEIMAN SALUM.... ................ .....................................APPELLANT VERSUS NATIONAL HOUSING CORPORATION....................................RESPONDENT (Appeal from the Judgment and the Decree of the High Court of Tanzania, Land Division at Dar es Salaam) (Mutunai. 3.1 dated the 17th day of November 2015 in Land Case No. 22 of 2011 RULING OF THE COURT 14th February & 27th August, 2025 MWARIJA, J.A.: The appellant, Fauz Suleiman Salum, was the plaintiff in the High Court of Tanzania, Land Division at Dar es Salaam in Land Case No. 22 of 2011 (the suit), the decision of which has given rise to this appeal. The suit was filed against the respondent, National Housing Corporation (NHC), a statutory public corporation established under the National Housing Corporation Act, 1990 (No. 2 of 1990). The suit arose from a dispute over a joint venture agreement for development and ownership of Plot No. 1/20, Uhuru/Congo Street, within the Dar es Salaam Municipality

(hereinafter "the suit property")- In the High Court, the appellant sought the following reliefs:

1. An order for specific performance of the joint venture agreement dated 3r d February 2006.
2. Payment of general damages in excess of TZS 2,000,000,000.00 to be assessed by the court.
3. Payment of special damages amounting to TZS 291,000,000.00 for costs incurred in architectural drawings, building permits, contractor's engagements and legal services.
4. Costs of the suit and any other reliefs which the court would deem fit to grant. The appellant contended that, pursuant to the agreement signed on 3r d February 2006, he entered into a joint venture agreement with the respondent to develop the suit property by providing 100% finance and the respondent would contribute part of its interest in the suit property and initially, retain 25% while the appellant was to own 75% of the interests. After completion of construction, the respondent would purchase 25% and own 50% of the interests in the suit property. The appellant alleged that, he fulfilled his obligations by securing a building permit, preparing architectural drawings, and engaging

contractors, but the respondent unlawfully suspended and later terminated the agreement on the 3r d August 2010 citing complaints from the person alleged to be the ex-owner, directives from the Prevention and Combating of Corruption Bureau (PCCB) and a Government ban on joint venture agreements on the respondent's properties. The appellant contended that, the termination was unjustified. He blamed the respondent for having misrepresented to him that, it was the owner of the suit property and for having failed to honour its subsequent commitment to provide an alternative plot at the junction of Lumumba and Udoe Streets. In its defence, the respondent maintained that, the joint venture agreement was mutually rescinded on the 2n d July 2009 as evidenced by the correspondence between the parties, with each side agreeing to bear its own costs. It claimed further that, the termination was justified due to unforeseen resistance from the ex-owner, Mohamed Abdallah Ahmed, failure by the appellant to comply with the Public Procurement Act (No. 21 of 2004) and the Government directive issued on the 22n d November 2008, prohibiting it from entering into new joint venture agreements. The respondent also disputed the appellant's claim for damages asserting that,

the claimed costs lacked documentary proof and were not recoverable under the rescinded agreement. The High Court (B. R. Mutungi, 1), dismissed the appellant's suit with costs. She found that, the joint venture agreement was mutually rescinded on the 2n d July 2009 as confirmed by the appellant's advocate in a letter dated 5th August 2009 (exhibit PI2). She held that, under section 62 of the Law of Contract Act, Chapter 345 of the Revised Laws, the contract ceased to be enforceable upon a mutual rescission. She held further that, the appellant's claims for specific performance and damages were untenable as both parties had agreed to bear their own costs. As for the special damages, it held that, the same were not sufficiently proved by receipts or evidence of actual expenditures. Aggrieved by the High Court's decision, the appellant has lodged this appeal challenging the finding that, there was a mutual rescission of the contract. He also challenged the dismissal of his claim for specific performance and special damages contending that, the learned trial Judge had failed to properly assess the evidence. He raised the following four grounds of appeal:

"1. The trial Judge erred in law and fact by holding that, the contract dated J d February 2006 was properly terminated by the respondent. 2. The trial Judge erred in law and fact by holding that, the contract ceased to exist on 2n d July 2009 during a joint meeting between the parties. 3. The trial Judge misdirected herself by denying the appellant specific and general damages for breach o f contract and by awarding the respondent costs. 4. The decision was flawed for not considering the appellants written submissions and the substantial evidence presented, as opposed to the respondents weaker evidence" At the hearing of the appeal, the appellant was represented by Mr. Job Kerario, learned counsel while the respondent was represented by Mr. Deodatus Nyoni, learned Principal State Attorney assisted by Ms. Frida Mollel, learned State Attorney. Before the appeal could proceed to hearing, Mr. Nyoni raised a preliminary objection to the effect that, the appeal is incompetent for having originated from the proceedings which were a nullity. The preliminary objection was predicated on Order XXIII rule 1 (3) of the Civil Procedure Code, Chapter 33 of the Revised Laws (the CPC).

Submitting in support of the raised point law, the learned Principal State Attorney argued that, according to the record of appeal at page 129, on the 31/5/2012 the suit was withdrawn at the instance of the appellant. However, on the 29/5/2013, as reflected on page 123 of the record, upon the oral application made by the appellant's counsel, the same court gave an order setting aside its withdrawal order, restored the suit and ordered the same to proceed to hearing. It was Mr. Nyoni's submission that, because the suit was marked withdrawn without leave to refile it, the trial court was fanctus o/ffc/o and therefore, by setting aside its previous order, it acted without jurisdiction. He summed up that, the proceedings subsequent to the withdrawal order were a nullity because they were not based on a formal application which should have been made under rule 2 (b) of Order XXII at the CPC. He added that, the restoration order was erroneous and could not therefore, cure another error of failing to comply with the said provision. He cited the case of LAKAIRO Investment Ltd v. Commissioner General, Tanzania Revenue Authority (Civil Appeal No. 452 of 2021) [2023] TZCA 18021 to support his argument. 6

In reply to the submissions made by the learned Principal State Attorney, Mr. Kerario argued that, from the record, the proceedings which followed after the withdrawal order suggest that, there was an application for restoration of the suit vide suit the order dated 13/8/2013. When probed as to whether the Court can act on the assumption that there was such an application which, according to him, was made under Order XXIII rule 2 (b) of the CPC, the learned counsel decided to leave the matter to the Court to determine it as may deem appropriate. From the nature of the preliminary objection and the rival submissions of the learned counsel for the parties, the issue for our determination is whether the proceedings giving rise to the appeal were a nullity. It is an undisputable fact that, on the 31/5/2012 the suit was marked withdrawn following a prayer made by the learned counsel who held the brief of the appellant's advocate. It is also not disputed that, on the 29/5/2013, the same court proceeded to set aside its withdrawal order and restored the suit to hearing. Under rule 1 (1) of Order XXIII of the CPC, the plaintiff may withdraw his suit at any time after instituting it. The provision states as follows: "1- (1) At any time after the institution o f a suit the plaintiff may, as against ail or any o f the

defendants, withdraw his suit or abandon part of his claim" Under rule 1 (3) of the same order, after the plaintiff has withdrawn his suit, he is precluded from refiling it unless the order of withdrawal of the suit was granted with leave to refile it in terms of rule 2 (b) of the same order. Rule 1 (3) of Order XXIII states that: ”1- (.t ).... (3) Where the plaintiff withdraws from a suit, or abandons a claim, without the permission referred to in sub-rule (2), he shall be liable for such costs as the court may award and shall be precluded from Instituting any fresh suit in respect of such matter or such part of the claim " [Emphasis added]. Order XXIII rule 2 provides for two distinct types of withdrawal orders; one, absolute withdrawal which is termed as abandonment and two, conditional withdrawal whereby, the plaintiff is allowed to refile the suit or part of the claim on the same cause of action upon establishment by him of either of the two grounds; existence of a formal defect which

will make the suit or part of it fail or other sufficient grounds. The provision states as follows: " Where a court is satisfied- (a) that a suit must fail by reason o f some formal defect; or (b) that there are other sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter o f a suit or part o f a claim, it may, on such terms as it thinks fit, grant the plaintiffpermission to withdraw from such suit or abandon such part of a claim with liberty to institute a fresh suit in respect o f the subject matter o f such suit or such part o f a claim" It is imperative to state that, under sub-rule (3) of Order XXIII of the CPC, a prayer for withdrawal of the suit with liberty to refile is conditional upon establishment of either of the two grounds stipulated under sub-rule 1 (2) of the same Order. The prayer to that effect must therefore, be made at the time of making the application to withdraw the suit, not otherwise. For this reason, the submissions by the leaned counsel for the parties on the existence or otherwise of an application from which the appellant was granted leave to recommence the suit after 9

its withdraw on the 31s t May 2013, are therefore, with respect, misconceived. As clearly stated under Order XXIII rule 1 (3), upon an absolute withdrawal of the suit, the plaintiff is precluded form refiling it. This means, he cannot, after withdrawal, make an application to do so. As stated above, such an application must be made at the time of seeking withdrawal under sub-rule 1 (2) of Order XXIII of the CPC. The order withdrawing a previous suit with liberty to refile is essential and should be accompanied to the subsequent suit, failure of which, the plaintiff would be barred in terms of rule 1 (3) of Order XXIII of the CPC. We wish to observe also that, even if there would have been an order granting the appellant leave to withdraw the suit with leave to refile, the subsequent proceedings should not have been conducted in the record of the withdrawn suit as was the case in this matter. The same should have been conducted afresh in a subsequent suit. A new suit based on the same cause of action should have been filed. On the basis of the foregoing reasons, we find that, the answer to the issue in the affirmative; that, the recommencement of hearing the suit after having been withdrawn on the 31s t May 2013 without the court's leave to refile it, rendered the proceedings a nullity. In the circumstances, 10

we invoke the provisions of section 4 (2) of the Appellate Jurisdiction Act, Chapter 141 of the Revised Laws and hereby quash the proceedings of the High Court conducted immediately after the withdrawal order and set aside the resultant judgment. The order of the High Court marking the suit withdrawn remains in force. The appellant to bear the costs. DATED at DODOMA this 25th day of August, 2025. A. G. MWARIJA JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL L. M. MLACHA JUSTICE OF APPEAL The Ruling delivered this 27th day of August, 2025 in the presence of the Mr. Job Kerario, learned counsel for the appellant and Ms. Narindwa Sekimanga, learned Senior State Attorney connected via video conference, is hereby certified as a true copy of the original. D. R. LYIMO DEPUTY REGISTRAR COURT OF APPEAL li