Mexons Energy Limited vs NMB Bank PLC (Civil Appeal No. 517 of 2024) [2025] TZCA 807 (6 August 2025)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA ( CORAM: MWANDAMBO. J.A., MWAMPASHI. J.A. And MGEYEKWA. J J U CIVIL APPEAL NO. 517 OF 2023 MEXONS ENERGY LIMITED .... . .................. . ................................. APPELLANT VERSUS NMB BANK P L C ...................... . ........................................ . ....... RESPONDENT (Appeal from the Ruling and Order of the High Court of Tanzania (Commercial Division) at Dar es Salaam) (Ndunauru. J.^ dated the 30th day September, 2022 in Commercial Case No. 104 of 2021 JUDGMENT OF THE COURT 29th July & 6th August, 2025 MWANDAMBO, J.A.: The appellant, Mexons Energy Limited, was dissatisfied with the decision of the High Court (Commercial Division) made on 30 September 2022 striking out its suit for being instituted prematurely after sustaining a preliminary objection raised by the respondent. From that decision, the appellant has appealed before the Court. The facts from which the appellant instituted the suit in Commercial Case No. 104 of 2021 have a genesis from the sale of a landed property known as plot No. 230 Block 'A' Mafinga urban area, L.O. No. 1289 l

comprised in CT No. 2889 MBYLR (the suit property). The registered owner of the suit property, one Hussein Amran Kangesa ("the mortgagor") placed it as security by way of mortgage in favour of the respondent against a loan advanced to him. Upon default in repayment of the loan, the respondent exercised its right of sale under the mortgage which by selling the suit property by public auction conducted on 13 May 2017 at which, the appellant emerged the successful bidder. Despite being issued with a certificate of sale and having executed the necessary conveyancing documents towards transfer of the suit property in the appellant's name, the respondent failed in delivering vacant possession of the property to the appellant. By reason of such failure, the appellant instituted the suit for several reliefs, amongst others, a declaration that the respondent breached the sale contract, delivery of vacant possession and monetary compensation for loss of income allegedly suffered due to non-delivery of vacant possession. Resisting the suit, the respondent's case was that failure to deliver vacant possession was due to institution of a suit in Land Case No. 8 of 2017 by the mortgagor who successfully challenged the sale before the High Court at Iringa which set aside the sale for being a nullity. 2

In its defence the respondent contended that, after the decision of the High Court, it challenged such decision before the Court in Civil Appeal No. 332 of 2019 which was still pending. In effect, the respondent's case was that, it could not deliver vacant possession of the suit property to the appellant due to the pending litigation in Land Case No. 8 of 2017 and resultant judgment and the pending appeal which rendered suit unmaintainable. After the completion of preliminaries in the suit including framing of issues followed by the filing of witness statements in accordance with the High Court (Commercial Division) (Procedure) Rules, (2012) G. N. No. 250 of 2012 as amended, the trial court fixed the hearing of the suit during which, witnesses whose witness statements had been filed would formally tender exhibits referred to in their respective statements and stand witness box for cross-examination. That notwithstanding, on 16 May 2022, the learned advocates for the respondent lodged in the court a notice of preliminary objections contending that the suit was unmaintainable on two but related grounds that is; (1) it was premised on the alleged breach of contract for sale and/or specific performance for handing over of the suit property which was subject of court proceedings in Civil Appeal No. 332 of 2019 and, (2) it was premature for its subject 3

is subject of court proceedings in Civil Appeal No. 332 of 2019. After receiving written submissions from the learned advocates for and in opposition, the trial court delivered its ruling sustaining the objections before concluding that the suit was filed prematurely and struck it out. The appellant faults the impugned decision on four grounds of appeal that is to say; holding that the suit was premature striking it out in consequence, holding that the suit was barred by section 9 of the Civil Procedure Code ("the CPC") for being res judicata and, that the decision is otherwise erroneous and faulty. However, as it shall become apparent later in this judgment, the determination of the appeal turns on a different issue outside the memorandum of appeal. Ahead of the date set for hearing of the appeal, the respondent's learned advocates through Messrs. Seni Malimi and Gasper Nyika, lodged a notice of preliminary objection contending that the appeal is legally unmaintainable having been instituted contrary to the provisions of section 8 (2) (d) of the 2023 Revised Edition of the Appellate Jurisdiction Act (the AJA). It is significant that, prior to the revised edition, the relevant provision was section 5 (2) (d) of the AJA. The appeal was called on for hearing on 23 July 2025 on which we heard arguments for and against the preliminary objection. Mr. Daniel

Welwel, learned advocate represented the appellant whereas Messrs. Seni Malimi and Gasper Nyika, both learned advocates acted for the respondent. The gravamen of the submission by the learned counsel for the respondent in support of the objection was that the appellant had no right of appeal against an order striking out the suit because that order had no effect of a finality. Counsel relied on several previous Court's decisions on the import of section 8 (2) (d) (previously section 5 (2) (d)) of the AJA, in particular, Petrolube (T) Ltd & Another v. Bulyanhulu Gold Mine Limited [2025] TZCA 559, for the proposition that, the determination of the issue should base on the effect of the impugned order that is; whether it had an effect of finality. From that proposition, counsel impressed upon the Court that the order striking out the suit had no effect of finality to warrant an appeal to the Court. In elaboration, Mr. Nyika contended that, since the High Court simply struck out the suit for being premature, the appellant is at liberty to institute a fresh one after fulfilling the necessary conditions rather than challenging that decision by way of an appeal which contravened section 8 (2) (d) of the AJA. With equal conviction, Mr. Welwel urged the Court to dismiss the preliminary objection for being misconceived and advanced two reasons 5

in support. The first relates to reference to section 9 of the Civil Procedure Code which meant that the suit was struck out for being res judicata which closed doors to the appellant to reinstitute a fresh one. According to the learned advocate, a determination that the suit was res judicata was not an interlocutory order targeted by section 8 (2) (d) of the AJA. On the other hand, counsel contended that, striking out the suit for being premature was problematic and that is why, prematurity by itself as a ground for striking out the suit is a subject of a challenge before the Court. That is so, he argued, the trial court misapprehended the facts thereby coming to an erroneous conclusion that the suit was premature without any explanation on the condition allegedly unfulfilled by the appellant rendering the suit premature. On that basis, it was argued for the appellant that, the Court's decisions in Petrolube and others cited therein are distinguishable to the facts in the instant appeal. That is so, he argued, in Petrolube, the trial court dismissed the suit for want of a board resolution which meant that the plaintiff could easily reinstitute the suit upon complying with the requirement which was not the case in the instant appeal. 6

In a short rebuttal, Mr. Nyika urged that despite making reference to res judicata, the trial court's decision rested on prematurity rather than res judicata. After hearing counsel's arguments for and against the objection, we reserved our ruling to a date to be communicated to the parties by the Registrar which meant that, should the objection succeed, that would result in the disposal of the appeal and vice versa. During our deliberations, we formed an opinion that the objection was unsustainable but reserved our reasons to be incorporated in our decision on the merits of the appeal. We thus ordered the hearing of the appeal to resume on 29 July 2025. At the resumed hearing, Mr. Welwel appeared for the appellant This time around, Malimi teamed up with Ms. Samah Salah, learned advocates, acted for the respondent. Before delving into the appeal, we shall first give our reasons for dismissing the preliminary objection. Having heard rival arguments from the learned counsel for the parties, the issue for our consideration is whether the appellant had a right to appeal against an order striking out its suit for being premature. Section 8 (2) (d) on which the respondent has anchored its preliminary objection bars appeals from interlocutory decisions or orders unless such 7

decision or order finally and conclusively determines the suit or matter. Both Messrs. Nyika and Welwel are agreeable that whether a decision or order is interlocutory or not for the purpose of section 8 (2) (d) of the AJA, the Court has to ask itself whether it has a finality effect on the suit or matter. However, in our view, such a determination is a matter of fact to be decided on the peculiar facts of each case. Mr. Nyika urged us to find that the impugned decision does not fall under the category of cases with an effect of a finality and thus unappealable on the strength of the Court's decision in Petrolube. With respect, we have found ourselves not prepared to agree with him. We say so mindful that, unlike here, there was no dispute in Petrolube that the plaintiff instituted its suit without a board resolution which rendered it, erroneously though, incompetent. In other words, despite the fact that obtaining a board resolution was not a legal requirement, following the order striking the suit, the plaintiff could have easily made good the defect and reinstituted that suit. Apparently, as submitted by Mr. Welwel, that is not the case in the instant appeal where it is not clear what condition was the appellant required to fulfil before instituting the suit. It is not clear to us whether the decision nullifying the sale of the property in Civil Appeal 8

No. 8 of 2017 and the resultant Civil Appeal No. 332 of 2019 constituted a condition precedent for the appellant to institute the suit. It is pertinent that, counsel for the respondent argued that the impugned decision was not predicated upon res judicata. An examination of the written submissions by the learned advocate for the respondent appearing at page 895 through 897 of the record of appeal heavily relied on the principle of res judicata under section 9 of the CPC to persuade the court that the suit was premature from which, the learned Judge stated: "/ am fortified to keenly read the provisions o f section 9 o f the Civil Procedure Code.... [at page 1045 o f the record o f appeal] What followed after the keen reading of section 9 of the Civil Procedure Code and reproducing it is a discussion tending to suggest that the suit had the attributes of re judicata. After that discussion, albeit not a straight forward one, the learned Judge continued: "Moreover, the outcomes o f litigations are well known > if in the said a p p e a lth e Defendant [respondent] loses again, [it] means that it has no property to offer the Plaintiff [the appellant] herein vacant possession, but if she succeeds, [it] means that vacant possession o f the subject m atter could be offered to the p la in tiff herein inter alia. "[At page 1046 o f the record]. 9

After all that discussion, the court concludes at page 1048 of the record as follows: "From the above analysis, I am in fu ii agreement with the Iearned counsel for the Defendant, Mr. Maiimi, that, this suit has been prem aturely filed in this court. The consequences 158 for it to be stuck o u t..." Tliere can be no doubt now that, by and large, Mr. Malimi's submissions which the learned judge found himself in full agreement relied heavily on res judicata as a basis for the conclusion that the suit was filed prematurely. It is equally clear that, despite Mr. Nyika's submission that the suit was not struck out for being res judicata, a close examination of the ruling suggests the opposite of it. It is for this reason, Mr. Welwel urged that, one of the appellant's complaint is that the impugned decision is otherwise faulty and problematic. Without deciding, the circumstances in this appeal dictate that if left as it is, the determination of the preliminary objection was largely influenced by arguments on res judicata which had all the ramifications of a finality warranting an appeal to the Court. It is for the foregoing that we found the preliminary objection misplaced and overruled it which now takes us to the merit of the appeal. 10

As mentioned earlier on, the appellant preferred four grounds of appeal followed by the written submissions in support and later, reply submissions from the respondent's learned advocates. At the resumed hearing, the learned counsel addressed us orally in addition to the written submissions highlighting on a few aspects thereon. In the course of hearing, the Court invited counsel for both parties to address us on an issue outside the grounds of appeal, that is, whether the trial Judge addressed himself on a point raised by the appellant's counsel on the preliminary objection. It is remarkable at pages 960 and 961 of the record of appeal that, the appellant's counsel contested that it was not a preliminary objection on a pure point of law citing, Mukisa Biscuits Manufacturing Co. Ltd v. West End Distributors Ltd [1969] EA 696. Counsel urged the trial court to dismiss the preliminary objection for failure to meet the threshold test it being based on facts to be ascertained by evidence. In his written submissions in rejoinder, in particular, at page 1011 of the record, the respondent countered that submission arguing that the preliminary objection was properly raised it being on pure points of law. In its ruling, the learned Judge said nothing in that regard. li

In the response to the issue, Mr. Weiwei was emphatic that, failure by the trial court to discuss the appropriateness of the preliminary objection and proceeding to determine it as it did was erroneous considering that its determination entailed reference to evidence. Mr. Malimi took a different view arguing that it was based on pure points of law and so the learned judge was right in determining it as he did. Having heard rival arguments from the learned counsel on the issue, there is no dispute that the trial court made no reference to the appellant's contention whether the preliminary objection was indeed based on pure points of law to be determined as such without recourse to evidence. Despite Mr. Malimi's stance, we are settled in our minds that the omission to consider the issue constituted an irregularity in the proceedings and the resultant decision. In our view, the determination of the propriety of the preliminary objection was critical to the decision since it aimed at questioning the court's power to determine it in the first place. Had the trial court directed its mind properly to the nature of the preliminary objection in the light of the facts, it would not have proceeded to determine it as it did. We say so mindful of the fact that the responded pleaded the same issue in its the written statement of defence contending that the suit was unmaintainable by reason of the proceedings and 12

judgment in Land Case No. of 2017 which resulted in Land Appeal No. 332 of 2019. Indeed, at the final pre-trial conference conducted on 25 March 2022, the court framed two issues in connection with Land Case No. 8 of 2017 and Civil Appeal No. 332 of 2019 and the parties filed their respective witness statements issues and, after the filing of the witness statements, the case was ripe for hearing. Surprisingly, the respondent lodged a notice of the so called preliminary objections a few days prior to the commencement of hearing based on the same aspects raised in the pleadings and witness statement, which could be determined in the suit. It cannot be seriously doubted that, if anything, the preliminary objections meant to circumvent the determination of the suit on the issues framed disregarding the evidence for and against. It is significant that, in terms of Order XIV rule 1 (4) of the CPC, issues may be either on facts or law. As to how the trial court is to determine issues, Order XIV rule 2 of the CPC stipulates: "Where issues both o f law and o f fact arise in the same suit ; and the court is o f opinion that the case or any part thereof may be disposed o f on the issues o f taw only, it shall try those issues first, and for that purpose may, if it thinks fit, postpone the settlem ent o f the issues o f fact until after the issues o f law have been determined . " 13

It is logical from the foregoing provision that, if the trial court formed an opinion that there were issues of law which entailed early determination, the proper course of action was to try such issues and postpone determination of the rest. We must stress here that, what was required was to try such issue by way of evidence as opposed to determination of them in the form of preliminary objection as the court did. In the upshot, all things considered, we are satisfied that the trial court strayed into an error in entertaining and determining the preliminary objections as it did which were substantially in issue in the suit which on evidence had been presented through witness statements. It is clear to us that the circumstances of the case did not call for a preliminary objection because such points did not involve jurisdiction, limitation or res judicata the more so raised after the scheduling order during the first pre trial conference. Proceeding in the manner the trial court did constituted an irregularity in the proceedings before the trial court which was inimical to the smooth conduct of cases warranting the Court's exercise of its revisionary power under section 6 (2) of the AJA. Consequently, we are constrained to quash the impugned decision and the resultant order for being a nullity as we hereby do. Going forward, 14

in terms of rule 38 of the Tanzania Court of Appeal Rules, 2009, the proceedings from which the appeal has emanated are hereby remitted to the High Court for continuation of the trial from the stage it had reached immediately before the filing of the notice of preliminary objections in accordance with the law. Since the disposal of the appeal is on an issue raised by the court suo motu, we order that each part bears its own costs. Order accordingly. DATED at DODOMA this 5th day of August, 2025. L. J. S. MWANDAMBO JUSTICE OF APPEA A. M. MWAMPASHI JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL The Judgment delivered this 6th day of August, 2025 in the presence of Mr. Daniel Welwel, learned advocate for the Appellant, Ms. Faiza Salah and Mr. Dennis Maganga, both learned advocates for the Respondent, via virtual Court, is hereby certified as a true copy of the original. f , ! D. R. LYIMO t ' DEPUTY REGISTRAR COURT OF APPEAL