MEK One Industries Ltd vs Rungwe District Council & Another (Civil Appeal No. 365 of 2023) [2025] TZCA 819 (7 August 2025)

IN THE COURT OF APPEAL OF TANZANIA AT MBEYA ( CORAM: SEHEL. 3.A.. GALEBA. J.A.. And KHAMIS. J.A.^ CIVIL APPEAL NO. 365 OF 2023 MEK ONE INDUSTRIES LTD APPELLANT VERSUS RUNGWE DISTRICT COUNCIL... THE HON. ATTORNEY GENERAL 1 st RESPONDENT .2 nd RESPONDENT (Appeal from the Judgment and Decree of the High Court of Tanzania at Mbeya) f Karavemaha. J.^ dated the 16th day of August, 2022 in Civil Case No. 6 of 2020 JUDGMENT OF THE COURT 29h July & 7th August, 2025 GALEBA, J.A.: This is a first appeal tracing origin from an aborted business relationship based on a lease in which the appellant, MEK One Industries Ltd was the lessee and the 1s t Respondent, Rungwe District Council, the lessor. The lease was in respect of a parcel of land known as Plot No. 1A and 1C located at Tukuyu township along Mbeya - Malawi Highway, (the disputed property). Land use for the disputed property, was a filing station. The terms of the lease were constituted in two major documents; the main lease which was executed on 11th April, 2013 and an addendum

to it, dated 15th June, 2015 (collectively marked as exhibit PI at the trial). The terms of the lease between the parties which are relevant to this appeal, were the following; first, consent had to be sought and obtained by the appellant from the 1s t respondent before the appellant could sublease any part of the disputed property or engage into any renovations of the property; secondly, monthly rent for occupying the property was agreed to be TZS. 1,000,000.00, and; thirdly, in case of breach of any term of the lease, the innocent party had a right to terminate it. As time went by, the 1s t respondent came to learn three key aspects of the lease that needed joint attention of the parties. Two were the 1s t respondent's proposals to amend the lease, and one had something to do with the appellant's non-compliance with the terms of the lease. The areas for potential amendment in view of the 1s t respondent were that; first, the lease was endless, it had no term limit on which it would come to an end, and the second point was that rent was too low, such that the 1s t respondent contemplated raising it to TZS. 3,500,000.00 per month. The third point was that the 1s t respondent had received unconfirmed information, that the appellant had sublet part of the disputed property to a third party without its consent, which, if confirmed as a fact, would be a violation of the lease.

So, on 8th October, 2017, the 1s t respondent, convened a meeting between the parties to the lease. At the meeting, the appellant's team introduced the fourth point for consideration at the meeting which was that, it already advanced a total of TZS. 425,000,000.00 to the 1s t respondent as renovation costs and rent advance. The meeting made resolutions in respect of each of the above four points. As for the increase in rent, it was resolved that the appellant would consider the proposal and communicate its position to the 1s t respondent by 15th November, 2017. On subleasing of the premises without consent of the 1s t respondent, the meeting required the appellant to come out clearly to the 1s t respondent, on whether the allegation was true or not, and communicate it by 15th November, 2017. It was also resolved that the lease should have clear end date corresponding to the rent advance already made by the appellant. As for the incurred renovation costs, the appellant was given up 15th November, 2017, to present the figure for verification by the 1s t respondent's experts. The minutes containing these resolutions, were admitted in evidence as exhibit P2. According to the 1s t respondent's letter of 20th December, 2017, which was admitted as exhibit P3, the appellant did not comply with any resolutions, such that, it was given up to 29th December, 2017, to comply. However, there was no exhibited communication between the parties, up

to when the appellant sent a letter dated 30th September, 2019 to the 1s t respondent attaching, a bill of quantities (the BOQ), exhibit P5 detailing the proposed costs for procurement of materials, components and labour. Noting noncompliance with the resolutions, on 13th January, 2020, the 1s t respondent issued a 30 days' notice to terminate the lease on two alleged breaches by the appellant. First was the subleasing of part of the disputed property to one James Thobias Chuwa (DW3); and, second, the act of renovating the disputed premises without consent of the 1s t respondent. Following the termination letter, the appellant filed Civil Case No. 6 of 2020 in the High Court of Tanzania, Mbeya (the trial court), demanding the following reliefs; first, refund of TZS. 425,000,000.00 as advance paid to the 1s t respondent; second, payment of TZS. 10,000,000.00 being follow-up costs, third, general damages for breach of contract, fourth status quo maintenance, and fifth, interest and costs. There was also an alternative prayer that the decretal sum be converted as future rent as parties may agree. The respondents disputed all claims except for TZS. 165,000,000.00, which was indeed paid by the appellant. As for breach of the lease, the respondents maintained that, the appellant was at fault although they did not file a counter claim to that effect.

From the pleadings, the following issues were framed at the trial; (1) Whether the plaintiff (now appellant) breached the tenancy agreement dated 11th April, 2013; (2) Whether the notice of termination dated 13th January, 2020 was valid: (3) Whether the plaintiff deposited a sum of T7S. 425,000,000.00 as advance rent to the 1s t respondent; (4) To what reliefs were the parties entitled. The case was duly heard, and in resolving the 1s t issue, the trial court at pages 299 and 300 of the record of appeal, held that: "Gathering from all the evidence and discussions, it is crystal dear that ■ the plaintiff sublet the property without the first defendants consent In so doing, I hold that the plaintiff breached the contract Concluding on issue number one, I find and hold that the plaintiff partly renovated the filing station without consent and completely violated clause 7 of the contract and clause 6 of the addendum". [Emphasis added] At page 300 of the record of appeal, the trial court, resolved the second issue as follows: "Since the plaintiff breached the contract and the same gave an option in case one party breached [it] to terminate it, the 1st defendant was

warranted to issue a notice o f intention to terminate, to the plaintiff. Therefore, the notice of 30 days issued to the plaintiff was valid". [Emphasis added] In resolving the issue whether the appellant proved its claim of TZS. 425,000,000.00, the trial court stated at pages 302 and 303 of the record of appeal, as follows: 7 have examined more c/oseiy the pieadings by the parties and the evidence. Apart from the admitted amount o f TZS. 165,000,000.00.\ TZS. 260.000.000.00 was not proved by the plaintiff...Since he failed, this court holds that the plaintiff deposited only the sum of TZS. 165.000.000.00 as advance payment to the 1st defendant ". [Emphasis added] In summary, except for TZS. 165,000,000.00 which was admitted by the 1s t respondent, the appellant's suit was dismissed with costs. Following the dismissal of the suit, the appellant preferred the instant appeal, which is predicated on the following grounds: "1. That, the honourable trial Judge erred in law and fact by contradicting himself in his decision, [on] one hand holding that there was an implied and express consent for renovation, at the same

time [on] the other hand, holding that implied and express consent for renovation was not proved. 2. That, having appreciated the strength o f exhibit P 2 a n d having appreciated that consent for renovation was express and implied, the honourable trial Judge erred in law and fact to hold that the consent did not extend to more than what is contained in exhibit P2. 3. That, despite dear evidence on records, the Honourable trial Judge seriously erred in law to hold that neither improvement nor costs for renovation were proved" At the hearing of this appeal, the appellant appeared through its company secretary, one Mr. Omari Mussa, who informed the Court that their advocate is not in attendance, but had informed from him to appear and inform the Court, that the appellant's side intended to rely on their written submissions. For the respondents, were Mr. Allan Shija, learned Senior State Attorney, together with Messrs. Mjahidi Kamugisha and Joseph Tibaijuka both learned State Attorneys. In supporting the 1s t ground of appeal, Mr. Mussa, stated that, the trial Judge made contradictory remarks on consent for renovation. He referred to page 292 of the record of appeal, where the Judge stated that, the appellant was given express and implied consent, and at page 294 of 7

the record, where the learned Judge stated that, consent for renovation was not proved. He implored us to invoke rule 36 (1) of the Tanzania Court of Appeal Rules 2009, (the Rules), to re-evaluate the evidence which was tendered, and come up with our own findings. In respect of the 2n d ground, Mr. Mussa argued that, the learned trial Judge having made a finding that the appellant had implied and express consent to renovate, he erred in holding that such consent did not extend beyond the items listed in exhibit P2. He argued that, in any event, there was no way the lease objective could be realized without renovating the business premises. All in all, Mr. Mussa's position was that, the consent was given. In reply to the 1s t and 2n d grounds, Mr. Tibaijuka submitted that, the appellant's contention was baseless, because, all renovations needed consent, which the appellant did not apply and obtain. He argued that as for renovations which were allegedly carried out, still in terms of clause 12 of the addendum, the appellant was needed to communicate the costs of the renovations to the 1s t respondent for verification by her engineers. He submitted that, this too was not done. The learned State Attorney referred us to the case of Tanzania Pharmaceutical Industries Limited and Another v. Dharam Singh Hanspaul & Sons Limited,

Civil Appeal No. 390 of 2022 (unreported), to assert his proposition for us to apply the doctrine of sanctity of contract, in the appeal before us. On the 3r d ground of appeal, the appellant's complaint was that the learned trial Judge erred by holding that the appellant failed to prove the renovations, and costs of such renovations. In supporting this ground of appeal, the written submissions of the appellant are to the effect that renovations were proved and the cost is clear. Mr. Mussa submitted that the District Engineer carried out the valuation of the works done at the site, and came up with a figure that DW2 did not remember. That, according to Mr. Mussa, was evidence of renovations. As for costs, he referred the Court to the BOQ, and contended that the figure in that document was the cost of the renovations. Thus, Mr. Mussa asserted that both the renovations and costs incurred in carrying them out, were proved to the hilt by presentation of the BOQ. In reply to this ground of appeal, Mr. Tibaijuka submitted that the BOQ was not proof of any costs incurred on the project. As for renovations, he submitted that, if any were carried out, they were so carried out without consent of the 1s t respondent as required by the lease; and as for costs, if any, the same were not sent to the 1s t respondent for 9

verification, as per the meeting of 8th October, 2017, contended Mr. Tibaijuka. After a thorough review of the record, we think that all the three grounds of appeal can be determined in one lot, by resolving two related issues, which are; one, whether the appellant obtained consent to carry out renovations at the disputed property, and; two, whether the alleged renovations and the costs allegedly incurred, were proved. In resolving the above issues, the appropriate angle from which to tackle the task, is to discuss first, the law relating to consent before a lessee can sublease part, or the entire leased premises, and also the consent of the lessor before a lessee can renovate leased premises. To do that, we plan to start with the Land Act (the LA). According to the set up and scheme of the LA, leases and all legal issues touching on leases, are covered under part IX, running from sections 81 to 114 thereof. According to section 93 (1) (i) of the LA, every long-term lease has an implied term built in it, that a lessee cannot sublease any part of the demised premises, without consent of the lessor. That section provides as follows: "93. (1) There shall be implied in every lease, other than a short-term lease, covenants by the lessee with the lessor binding the iessee- 10

(i) not to transfer, mortgage, charge, sublease or otherwise part with the possession o f the leased land or buildings or any part o f it without the previous written consent of the lessor ■ that consent not to be unreasonably withheld;". [Emphasis added] As for the remedies, section 105 (1) of the LA is loud and clear that: "i 05. -(1) On and after the commencement o f this Act\ a lessor may terminate a lease for non payment o f rent or for breach of any covenant in accordance and only in accordance with the provisions o f this Sub-Part ; notwithstanding any provision in any lease to the contrary". That is to say, in the event a lessee breaches a covenant not to sublease without consent, the lessor is entitled to terminate the lease. Complementing the above provision, is section 92 (2) (b) (ii) of the same Act, which provides that: "(2) There shall be implied in every lease covenant by the lessor with the lessee empowering the lessor- (b) to terminate the lease by serving a notice of intention to terminate the lease on the lessee where- l i

(ii) the lessee has failed for a period of one month to observe or perform any condition, covenant or other term, the observation or performance of which has been assumed by the lessee expressly or impliedly in the lease " [Emphasis added] In view of the above legal position, considering that the appellant did not appeal against the trial court's finding that it sublet part of the disputed premises to James Thobias Chuwa, (DW3) without the 1s t respondent's written consent, we share the same position as the trial court that, the 30 days' notice to terminate the lease, was not only a contractual right to exercise under the lease, but also it was an allowable statutory relief. With the above outline of the legal position, we think it is opportune to discuss the first issue, that is, whether the appellant obtained consent of the 1s t respondent to renovate the disputed premises. The appellant's position was that it had consent of the 1s t respondent to renovate the premises. Resolution of this issue entails a keen study and re-evaluation of the evidence that was tendered on behalf of the appellant. We will do so in view of the prayer by Mr. Mussa in his submissions, where he requested us to invoke our powers in rule 36 (1) (a) of the Rules, and carry out a fresh re-evaluation of the evidence and reach at a decision 12

which might not necessarily be the same as that of the trial court. In determination of the issue above, we will examine in details the appellant's evidence which was tendered by only two witnesses; Matson Mwakisombole (PW1) and Mohamed Edha Awadh (PW2). The evidence of PW1 runs from page 113 to page 115, but there is no reference to the 1s t respondent's consent for renovation. So, this evidence is irrelevant as far as the point in issue is concerned. That said, the only remaining evidence from the appellant's side relevant to the issue, is that of PW2, who stated at pages 125 and 127 of the record of appeal, that: ”Before conducting a joint valuation, we received a letter from [the] District Executive Director o f intention to terminate within 30 days. Our board sat and the resolution was to contest the decision. The notice said that termination was due to subleasing without their consent Similarly, to rehabilitate the station without a permit from the District Council. These reasons were not realistic. I have never subleased the Petrol Stations to anyone. It was run by MEK One Industries Limited. The rehabilitation was in the course o f executing the contract conditions... Item 4 o f the addendum prohibits the lessee from renovating without obtaining consent from 13

the lesson Consent is found in item 1 o f the addendum. ..The initial stage o f renovation started in 2013. We entered the addendum in 2015. By 2013 when we engaged on initial stage o f renovation, we were under the 2013 contract. We did not have the permit". [Emphasis added] Before it escapes our mind to the background, we need to go to item 1 of the addendum which PW2 said in the above quotation that it granted the appellant consent to carry out renovations. Clause 1 of the addendum which is part of exhibit PI, is to the following effect: "1. That the lessor is the owner o f the property named in this agreement\ underground tanks and the building, [whereas] the lessee is [the] owner o f the following equipment Dispensing Pumps as shown below: (i) Giibayco with serial no. 067680 model 164R 110826. (ii) Wayne with serial no. TN M950056 model 150IP23 HM. (Hi) Wayne with serial no. TN M95005 model 150IP23 HM. (iv) Wayne with serial no. TN M96015 model 1701P/23 HM. (v)Tokheim no. serial no. Model 93xa. 14

(vi) Generator-ATR Compressor and Fire Fighting equipment" Having examined the evidence of PW2 and indeed the appellant's entire evidence, we noted that the appellant's attempt to prove that renovations were carried out, centered upon the testimony of PW2, we propose to evaluate that evidence in the following manner: first, renovation was prohibited without prior consent to the 1s t respondent as per the lease and the addendum which were tendered by PW2. Second, PW2 admitted that no consent was obtained from the 1s t respondent for the renovation. Third, clause 1 of the addendum referred to above by PW2, as giving consent for renovation, is not relevant as it refers to parties' equipment. Fourth, the appellant did not tender any written consent from the 1s t respondent authorizing renovations. Fifth, Exhibit PI encompasses the lease and the addendum. Clause 4 of the lease provides that: "4. The lessee shall not renovate the leased property without obtaining a consent from the lessor Likewise, clause 4 of the addendum which is also part of exhibit PI, repeats the same clause verbatim. Despite these clauses, PW2 was unable to point out to any documentary evidence proving that the appellant 15

sought consent for renovation, and was granted by the 1s t respondent. Thus, the first issue of whether the appellant obtained a consent to renovate the disputed premises is resolved in the negative. We now turn to the second issue, whether the appellant proved the alleged renovations and costs allegedly incurred. Again, because PW1 at page 114 of the record said that he did not know what the case was all about, and was not aware of any agreement between the 1s t respondent and the appellant, we have to rely on the evidence of PW2 only. On this issue we have attentively studied and duly considered the appellant's submissions in this appeal, and noted that, the single document that the appellant relied upon to prove that it spent money on renovation is exhibit P5, the BOQ. This is reflected in the evidence of PW2 at pages 129 and 130 of the record of appeal, where he stated that: "The BOQ is the Biii o f Quantities which indicates the costs in renovation or which would be incurred in renovation. In real sense BOQ are costs already incurred... We made the BOQ in order to prove that we paid the money. In my view, the BOQ proves the payment o f the money....The BOQ proves that Tshs. 56,324,000/= was spent in labour and

transport. The BOQ proves the claim without receipt". The trial Judge dismissed the BOQ as unreliable to prove that the alleged costs were incurred. We very much associate ourselves with that position of the learned trial Judge, for multiple reasons including; one, in the pleadings, particularly in clause 4 (i) of the plaint, the appellant pleaded that, the renovation cost was TZS. 165,000,000.00, whereas in the BOQ the cost of the same renovation amounted to TZS. 243,369,317.22. The appellant's written submissions at the trial court and even in this appeal, show that the appellant incurred TZS. 165,000,000.00. In other words, the figures in the pleadings and those in the BOQ do not match. Two, the BOQ does not show that any money was paid to any supplier or any item was received by the appellant and when. That is to say, there are no agreements or contracts which were tendered to show that any third-party suppliers of building materials or contractors for works rendered any services at the disputed premises, and that such third parties were paid any money by the appellant. Three, the maker of the BOQ was never disclosed not testified, to justify its contents. In addition, the appellant did not call any supplier who supplied any building materials or any contractor who executed any work or who installed any equipment or machines at the disputed premises, to prove 17

that such supplier or contractor or expert was paid any money from the appellant. In this case, PW2 did not even tender a single receipt from any supplier of any item installed at the disputed premises. In other words, if it was impossible to procure contractors who executed the works, how was it not possible for the appellant to even produce a single receipt to prove any spending on renovation. In any event, a BOQ in construction or engineering is simply a document, typically prepared by quantity surveyors detailing material estimates, components, labor and their cost estimates necessary to complete a given project. Costs in the BOQ are mere estimates. In summary, we agree with the learned trial Judge when he concluded that, except for the amount that was admitted by the 1s t respondent, the appellant failed to prove that he spent any money on renovation. In our view, failure to prove that any costs were spent on the renovation and having resolved that the appellant did not prove to have obtained any written consent to carry out any renovations, the sub-issue whether renovations were carried out, becomes illogical. In the circumstances, the second issue, whether the alleged renovations and costs allegedly incurred were proved by the appellant before the trial court, is also answered in the negative. In the event the 1s t, 2n d and 3r d grounds of appeal have no merit, we therefore dismiss them. 18

That said and done, as the three grounds upon which the appeal was predicated have been dismissed, in the same vein the appeal lacks merit, so we hereby dismiss it with costs. DATED at MBEYA, this 6th day of August 2025. B. M. A. SEHEL JUSTICE OF APPEAL Z. N. GALEBA JUSTICE OF APPEAL A. S. KHAMIS JUSTICE OF APPEAL Judgment delivered this 7th day of August, 2025 in the presence of the M r. Daniel Lawrence Muya, learned counsel holding brier Omary Musa, for the Appellant and Ms. Mary Peter, learned State Attorney, for the Respondent, is hereby certified as a true copy of the original. C. M. MAGESA DEPUTY REGISTRAR COURT OF APPEAL ?.£\ e - M. MAGESA 19