Golden Reef Limited vs ULF Nilson (Civil Appeal No. 634 of 2022) [2025] TZCA 861 (14 August 2025)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM fCORAM: NDIKA. J.A.. KENTE. J.A., And MANSOOR, J.A.^ CIVIL APPEAL NO. 634 OF 2022 GOLDEN REEF LIM ITED .................................................................... APPELLANT VERSUS ULF NILSON ................................................................................... RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania, at Dar es Salaam) (Kulita, 30 dated the 31st day of December, 2020 in Land Case No. 39 of 2014 JUDGMENT OF THE COURT 28th July & 14th August, 2025 KENTE. J.A: This appeal has its roots in the decision of the High Court of Tanzania (the trial court) sitting at Dar es Salaam, in Land Case No. 39 of 2014. By the said decision which was handed down on 31st December, 2020 the appellant's claim for restoration of its Certificate of Title (No. 45952 in respect of Plot No. 15 Block "A" Kimbiji Area in Dar es Salaam Region) from the respondent, was rejected and the suit dismissed for lack of merit. As we shall later on demonstrate, while agreeing with the evidence and arguments advanced on behalf of the respondent but on a completely different subject, the learned Judge of the trial court took the view that, the i

respondent was entitled to the disputed Certificate for the reason that its possession which was being challenged by the appellant, was lawful. The factual background to this appeal, is relatively short and straightforward. It is well captured in the appellant's pleadings and, to recap on the events as they unfolded before the trial court, it goes as follows: Sometime towards the end of the year 2012, while making an inventory, the appellant noted the missing of its Certificate of Title No.45952 in respect of a property known and described as Plot No. 15 Block "A" at Kimbiji Area in Dar es Salaam. In the circumstances, the appellant had to report the loss to the Police and go on initiating the process of obtaining its replacement by first obtaining a loss report. The process also required the appellant to place adverts in the newspapers after consultation with the Registrar of Titles who would issue another Certificate in replacement. Following the appellants issuance of adverts in the newspapers and the Government Gazette, the respondent on his own volition made himself available and reported to the office of the Registrar of Titles indicating that, he was in possession of the appellant's Certificate of Title whereupon the Registrar of Titles advised the appellant to contact him with a view to having its certificate returned but sadly, that was not to be. It was alleged that, on being contacted by one of the appellant's Directors, the respondent allegedly refused to hand over to him the said certificate saying that, was entrusted to

him after he was assigned to take care of the property the ownership of which the said certificate served as official proof. Since the respondent did not have the reason and explanation of the circumstances under which he got hold of the disputed certificate and, having refused to return it back to its owner despite repeated demands, the appellant was finally impelled to seek a legal redress. To that end, in a quest to assert its right over the property and the Certificate of Title, the appellant as a plaintiff, on 20th June 2014 commenced an action in the High Court at Dar es Salaam seeking, (a) a declaration that the respondent's continued withholding of the said Certificate of Title was wrongful; (b) an order for return and handover of the said certificate to the appellant; and (c) general damages for unlawful withholding of the said Certificate. Moreover, the appellant prayed for interest on the general damages at the prevailing court rate from the date of judgment to the date of return of the Certificate. Subsequent to the statement of claim by the appellant being served on him, the respondent who was the defendant in the court below, responded but without denying the allegations made against him. While completely straying from the pleadings and the main point in contention, the respondent accused Messrs Meinrad Haule and Lazarus Sanga with being impostors trying to act as Directors and Shareholders of the appellant company. The respondent asserted that, the real Directors and shareholder of the appellant

company were allegedly Messrs Otto Holte and Lloyd Maartinsen who were at the time in Europe. Furthermore, the respondent claimed the two to have handed to him the disputed Certificate of Title allegedly for purposes of keeping it in safe custody and taking care of the property in question. On top of that, the respondent contended that, the loss report was fraudulently obtained following a misrepresentation made to the Police by Mr. Haule masquerading as the appellant's Director. According to the respondent, Mr. Haule had also presented forged share transfer documents purportedly executed on 14th November, 2008 by the alleged transferors. In his pleadings, the respondent was emphatic that, Mr. Haule had never acquired any shares in the appellant company and, as such, he could not have been appointed a Director of the said company. In what appears to be a complete departure from the appellant's claim and what was at issue between the parties, the respondent further claimed that, insofar as there was a dispute regarding the real shareholders and Directors of the appellant company, an issue which according to him, could not be verified at the time, the issue regarding the custody of the disputed Certificate of Title, could not be determined by the court until the requisite controversy on the status of Mr. Haule and Mr. Sanga is resolved. Otherwise, the respondent was resolutely opposed to the appellant's claim saying that,

the two persons purportedly acting on its behalf, had no the requisite legal capacity to do so. He prayed for the suit to be dismissed with costs. Going by the parties pleadings, the learned trial Judge formulated the following questions for determination as to, one, whether, Messrs Otto Holte and Lloyd Martinsen had lawfully handed over the Certificate of Title No. 45952 to the defendant (the present respondent) for safe custody; and, two, if the answer to issue number one is in the negative, whether the plaintiff (the present appellant) is entitled to repossession of the said Certificate of Title. Having heard and reviewed the evidence which was however on a tangent from the appellant's pleadings, the trial Judge made the following findings of fact; One, that Messrs Mathieson and Otto Arne Holte who were respectively defence witnesses number one and two (DW1 and DW2), had never transferred their shares in the appellant company to anybody; two, that the transfer documents were forged and finally that, the appellant was not entitled to repossession of the Certificate of Title as the respondent was possessing it lawfully. To top it all off, the trial court unilaterally condemned Messrs Haule and Sanga to pay the costs of the suit.

Disenchanted with the trial court's decision, the appellant has appealed to this Court advancing the following grounds of appeal which are essentially derived from the findings by the trial court: (i) That, the tria l court erred in law in holding that DW1 and DW2 never transferred their shares to anybody and in deciding on m atters which were not before the court; (ii) That, the tria l court erred in law in holding that the transfer o f shares documents were forged and were not genuine; (Hi) That, the tria l court erred in law in condemning Lazarus Sanga and M einrad Haule to pay costs without according them a right to be heard; (iv) The tria l court erred in law in holding that the appellant company was not entitled to repossession o f the Certificate o f Title and that the respondent had law ful custody o f it; and (v) That, the tria l court erred for failure to properly evaluate the evidence on record and in entering judgm ent in favour o f the respondent At the hearing of the appeal, Mr. Julius Bundala, learned counsel appearing for the appellant relied on the written submissions filed on 16th February, 2023 which he augmented with very brief oral submissions. Addressing the first ground of appeal, he submitted that, as a cardinal principle in civil litigation, parties are bound by their own pleadings and they are not allowed to depart from them by raising new claims which are not founded in pleadings

or inconsistent with what is pleaded by the adversary party. With regard to the duty of the trial court, Mr. Kalolo submitted that, it is not the duty of the court to adjudicate upon any matter other than the specific matters in dispute which the parties themselves have raised by their respective pleadings. The learned counsel cited the decision of this Court in the case of Barclays Bank (T) Ltd v. Jacob Muro, Civil Appeal No. 357 of 2019, [2020] TZCA 1875 (26 November 2020) together with an Article by Sir Jack I. H. Jacob titled "The Present Importance of Pleading" first published in Current Legal Problems (1960) at pg. 174 to underscore the position of the law that, parties are bound by their own pleadings and in the absence of amendment to the pleadings, the court is bound by the pleadings of the parties. According to Mr. Kaiolo, while it is indicated in the present case that under the first issue, the trial court was required to determine whether or not Messrs. Otto Holte and Lloyd Martinsen had lawfully handed over the Certificate of Title to the respondent for safe keeping it came out with a completely different issue and went on deciding that, Mr. Holte and Mr. Martinsen had never transferred their shares to anybody. He cited the case of Hood Transport Company Limited v. East African Development Bank, Civil Appeal No. 262 of 2019, [2022] TZCA 383 (21 June 2022) and a few others to underscore the point that, for an issue to be determined by the court, it must have been specifically raised in the pleadings. According to Mr. 7

Kalolo, the trial court's decision that DW1 and DW2 had never transferred their shares to anyone which was an issue not before the court, amounted to a fundamental error leading to a miscarriage of justice which cannot be ignored. As to the second and fourth grounds of appeal which respectively fault the trial court for holding that the transfer of shares documents were not genuine for having been forged and that the appellant company was not entitled to possession of the disputed Certificate of Title as the respondent was possessing it lawfully, Mr. Kalolo submitted conjointly that, the allegations of forgery which ought to have been strictly proven were not proven at all but, what is more, is the fact that forgery was not a point of contention between the parties. The learned counsel insisted that, since the allegation of forgery imputed criminal conducts on his clients, its standard of proof required ought to have been higher than a mere preponderance of evidence. Reverting to the third ground of appeal which faults the trial court for condemning Messrs. Sanga and Haule to pay the costs of the suit without according them a hearing, while proceeding from a jurisprudential stand point, Mr. Kalolo submitted that Mr. Sanga and Mr. Haule were not parties to the suit and that, whereas Mr. Sanga was just called as a witness, Mr. Haule had not featured anywhere in the proceedings before the trial court. The learned counsel called in aid our decision in the case of Deo Shiirima and 8

Two Others v. Scandinavia Express Services Limited Civil Application No. 34of 2008) TZCA 270 (27 December 2009) to emphasize the position of the law that, any decision affecting the rights or interests of any person arrived at without hearing the affected party, is a nullity, even if the same decision would have been arrived at had the affected party been heard. For the reason that will soon become apparent, we will not dwell much on the fifth ground of appeal by which, as already noted, the trial court is being faulted for allegedly failing to properly evaluate the evidence on record and erroneously arriving at the conclusion that the transfer of shares documents in the appellant company were forged and therefore unlawful and invalid. Like Mr. Kalolo, in his reply Mr. Joseph Rutabingwa learned counsel appearing for the respondent relied on the respondent's submissions filed on 8th March 2023 and subsequently made very brief oral submissions in augmentation. The learned counsel emphatically submitted that, in view of what was pleaded by the appellant in its reply to the respondent's written statement of defence, it is clear that there was a need for the trial court to decide who were really the lawful Shareholders and Directors of the appellant company. To illustrate the respondent's argument, Mr. Rutabingwa submitted that, on 5th September, 2014 the appellant filed a reply to the written statement of 9

defence stating that, no misrepresentation was committed by Mr. Haule and Mr. Sanga and that the two were lawful Directors and shareholders and further that, Messrs Otto Holte and Lloyd Meartinsen had ceased to be Directors as per the documents attached to the reply to the statement of defence. For that reason, the learned counsel submitted that, it is not correct for the appellant to say that the trial court had erroneously gone outside of the parties' pleadings and consequently decided matters that were not before the Court. Premising his point on the argument that the trial court had decided that the appellant company was owned by DW1 and DW2 and that Mr. Sanga and Mr. Haule were mere impostors, Mr. Rutabiingwa implored us to determine, in the first place, whether the appeal is properly before the Court and whether Haule and Sanga (the purportedly unseated Directors and shareholders) should have sought another avenue other than this Court to challenge the order unseating them. In this regard, the learned counsel relied on the famous case of Solomon v. Solomon & Company Limited [1897] AC 22 and insisted that, the law recognises the states of a company as a legal entity acting through its authorised officers or shareholders as opposed to a natural person who is a stranger. In the alternative, Mr. Rutabingwa submitted that, there was ample evidence from the respondent showing that DW1 and DW2 had never sold their shares to Sanga and Haule as alleged, a fact which, according to the 10

learned counsel, could be disposed of even by looking at the evidence of the appellant itself. The learned counsel contended that, the appellant had failed to discharge its duty in terms of section 110 of the Evidence Act regarding the burden of proof. With this, it was argued that, the trial court was on firm ground when it held that there was no proof that the shares in the appellant company had been transferred to Haule and Sanga. However, as alluded to earlier, by parity of reasoning, we will not rack our brains trying to decide whether Mr. Haule and Mr. Sanga were Directors and Shareholders of the appellant company and whether the share transfer documents were forged. With regard to ground three of the appeal which challenges the trial court for condemning Mr. Sanga and Mr. Haule to pay costs without being heard, Mr. Rutabingwa submitted that, the learned trial Judge was on firm ground in condemning them to pay costs. Our attention was drawn to the allegation that the two were the ones who had filed the suit before the trial court but in the name of the appellant company, allegedly purporting to be its Directors and shareholders. That, whereas Mr. Sanga appeared in court and gave evidence on his behalf, he also covered Mr. Haule with whom they had joined forces to take legal action against the respondent. According to Mr. Rutabingwa, in the circumstances of this matter, Mr. Haule should be deemed to have been heard by the court through Mr. Sanga. 11

To this end, it was submitted that having found that Haule and Sanga had never acquired shares in the appellant company and, since they had dragged the company into court without any justification, they were properly and justifiably condemned to pay the costs personally. Regarding the complaint in ground five which faults the trial court for failure to evaluate the evidence on record and unjustifiably entering judgment for the respondent, it was submitted that, the trial Judge made a proper evaluation of the evidence of both sides and correctly dismissed the appellants' suit. The learned counsel thus, implored us to dismiss the appeal for want of merit. We have considered the record of appeal, the arguments by the parties and the judgment being impugned. We wish to observe, as we set out to determine this matter, that, it draws us back to the elementary issue regarding the meaning, scope, purpose and function of pleadings in civil proceedings. While it is very elementary that in any civil action, the plaintiff is required to set the ball rolling by stating with precision the cause of action and the material facts upon which they rely to support their claim, the defendant on the other hand is obliged to clearly and intelligibly respond to the plaintiff's averments constituting the cause of action. Moreover, while a defendant can challenge the legal validity of the plaintiffs' claim through 12

various ways, they must specifically address the claim as otherwise, failing to respond can lead to a default judgment against them. Moreover, under the adversarial system of dispute settlement like ours, parties in legal proceedings are generally bound by their pleadings in that, they are expected to argue their case and present evidence within the framework established by their pleadings. Since every legal action is initiated by the plaintiff's statement of claim, the defendant is generally expected to confine himself to the boundaries of the plaintiff's pleadings and cannot introduce entirely new claims or defences not mentioned or not derived from the initial pleadings. Coming to the facts and circumstances obtaining in the present case, the fact that the central dispute between the parties, tested the legality of the respondent's possession and the retention of the appellant's Certificate of Title, cannot be gainsaid. In the circumstances, it was basically not in the mandate of the respondent who had no nexus to the appellant company to challenge the status of Messrs. Sanga and Haule in the said company through a civil claim not even initiated by himself (the respondent). Like in many other civil cases, the duty of the respondent who was the defendant before the trial court, was to address the allegations made against him. While we are mindful that the defendant in a civil action can present any facts that, if proven, would defeat the plaintiff's claim, even if those facts 13

are not directly related to the plaintiff's allegations, we regret to say that, in the matter subject of the present appeal, it was not open for the respondent who was undisputably not part of the appellant company to accuse Mr. Sanga and Mr. Haule with forgery of the share transfer documents. In this regard, since the decision of the court below seems to have been wholly anchored on this aspect, we wish to observe that, as the central dispute between the parties was on the lawfulness or otherwise of the respondent's possession and retention of the appellant's Certificate of Title and, given what our conceptual expedition herein above has so far revealed, it can be held without demur that, the learned trial Judge overreached himself by determining matters which were basically not in dispute between the parties and, over which the respondent had no real locus standi to pursue. We therefore find merit in the appellant's first and second grounds of appeal which we accordingly sustain. As to the complaint in ground three, we take the view that indeed, the trial court was entirely unjustified in condemning Mr. Sanga and Mr. Haule to pay the costs of the suit without according them a hearing. While we accept Mr. Rutabingwa's factual submission that Mr. Sanga had appeared to testify on behalf of the appellant, we are of the settled view that, the decision by the trial court to condemn him along with Mr. Haule to pay the costs of the suit was flawed both in principle and at law. For, what we have to look at 14

here, is whether Mr. Sanga and Mr. Haule were actually accorded a hearing before the trial court went on holding them personally liable to pay the costs of the suit and not who was instrumental in the institution of the suit, before the trial court. Applying our judicial pronouncements in a myriad of our earlier decisions including the cases cited to us by Mr. Kalolo, we hold in, the circumstances of this case that, with unfeigned respect, what the trial court did was totally violative of Article 132 (6), (a) of the Constitution which stipulates, inter alia that, when a person's rights and duties are being determined, they are entitled to a fair hearing. In this regard, we are not prepared to subscribe to Mr., Rutabingwa's argument that Mr. Haule was heard through Mr. Sanga who appeared to testify for the appellant as the two had allegedly been instrumental in prosecuting the suit before the trial court. In the absence of evidence showing that Mr. Sanga was acting as Mr. Haule's legal representative, Mr. Rutabingwa cannot be heard to say that through Mr. Sanga, the trial Court had heard Mr. Haule as well, before it went on condemning the two to pay the costs of the suit. Accordingly, we hold that the third ground of appeal too has merit and we allow it. As to the fourth ground of appeal, without spending much time to interrogate this issue, we would quickly observe that, in the view that we have taken which is that the trial court had made its decision on matters 15

beside what was in real controversy between the parties, the conclusion that the trial court strayed into error when it held that the appellant company was not entitled to possession of the disputed Certificate of Title and that the respondent had lawful custody of it, seems inescapable. Although Mr. Rutabingwa passionately advanced arguments suggesting that it was incumbent upon the trial court to determine in the first place, the shareholding and management of the appellant company, having regard to what we have stated in the preceding part of this judgment, we take the strong view that, the learned trial Judge had overreached himself and that, as a consequence, the central issue regarding the lawfulness or otherwise of the respondent's possession and retention of the appellant's Certificate of Title, was largely if not wholly, forgotten as to be consigned into oblivion. That said, we find merit in the fourth ground of appeal which we accordingly allow. Since the respondent did not dispute being in possession of the appellant's Certificate of Title and, as such, he could not lead any evidence to justify the contested possession other than saying that Mr. Sanga and Mr. Haule were not Directors and shareholders of the appellant company, a plea whose acceptance by the trial court we must say, has struck us in a negative way, we find and hold that, the respondent had squandered the opportunity to present his case and evidence in court. Stepping into the shoes of the trial 16

court, we aliow the appeal with costs and proceed to enter judgment in favour of the appellant. Consequently, the respondent is ordered within fourteen days of delivery of this judgment, to hand over the disputed Certificate of Title (No. 45952 in respect of Plot No. 15 Block "A" at Kimbiji Area, Dar es Salaam) to the appellant company's secretary or any other authorised officer failure to which, execution processes shall follow. DATED at DAR ES SALAAM this 13th day of August, 2025. G. A. M. NDIKA JUSTICE OF APPEAL P. M. KENTE JUSTICE OF APPEAL L. A. MANSOOR JUSTICE OF APPEAL Judgment delivered this 14th day of August, 2025 in the presence of Ms. Genoveva J. Kalolo, learned counsel for the Appellant and Mr. Dodius Rutabingwa, learned counsel for the respondent, is hereby certified as a true 17