Equity Bank Tanzania Limited vs Ndume Ng'okorome Maswale t.a Ndume General Supply (Civil Appeal No. 443 of 2022) [2024] TZCA 1268 (12 December 2024)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA (CORAM: LILA. J.A.. MURUKE, 3.A. And MDEMU, 3.A.) CIVIL APPEAL NO. 443 OF 2022 EQUITY BANK TANZANIA LIMITED ............................................. APPELLANT VERSUS NDUME NG'OKOROME MASWALE t/a NDUME GENERAL SUPPLY....................................... ................RESPONDENT (Appeal from the Judgment of the High Court of Tanzania at Dodoma) f Kaaomba, 3/1 dated the 30th day of 3une, 2022 in Land Case No. 12 of 2022 JUDGMENT OF THE COURT 25th November & 12th December, 2024 LILA. JA: This appeal arises out of a dispute in the performance of a loan agreement entered between the parties. In the course of execution of the terms of the agreement, the respondent felt that the appellant had breached the agreement consequent upon which he successfully instituted a suit against the appellant seeking for various reliefs before the High Court, Dodoma Registry. The decision aggrieved the appellant prompting him to lodge the present appeal.

Albeit briefly, these background facts tell the essence of the appeal before us. The respondent, a natural person resident in Dodoma and a sole trader under the name of Ndume General Supply, a business entity registered in Tanzania under Business Names (Registration) Ordinance, Cap. 213 (the appellant) sued the respondent, a commercial entity incorporated in Tanzania under the Companies Act Cap. 212 carrying out banking business including lending money to its customers upon execution of a loan agreement. The respondent sued the appellant for, essentially, breach of contract entered between them alleging that, it was agreed that the appellant has to advance to the respondent a loan facility of TZS 150,000,000.00 for the purpose of taking over the outstanding loan balance at Diamond Trust Bank (DTB) which was TZS 67,000,000.00 and the remaining sum of TZS 86,900,000.00 be used by the respondent for buying poly bag and Tarpaulin bale from LINYI XUDA IMPORT & EXPORT CO. LTD, as working capital. It was the respondent's claims in the suit he instituted before the High Court of Tanzania, Dodoma Sub- Registry, through the respondent Ndume Ng'korome Maswale (PW1) who was the sole plaintiff's witness, that in contravention of the agreed term in the loan agreement, only TZS 115,622,975.00 was deposited in his account instead of the agreed loan amount of TZS 150,000,000.00 and that, out of that amount, TZS 119,416,557.27 was paid to DTB and not

TZS 67,000,000.00 hence a breach of the agreement. As a consequence, he claimed that failure by the appellant to disburse the loan as agreed caused him to suffer some difficulties in running his own business as well as facing threats of the collaterals being sold by Mbogo Auction Mart Real Agency, then 2n d defendant but now not a party to this appeal. He was also displeased with the manner he was linked with one Muraad Al-Atas (hence froth Muraad) with whom he entered into another agreement to be advanced TZS 37,000,000.00 which was to be paid within two weeks out of which TZS 35,000,000.00 was transferred into his account and later on TZS 39,000,000.00 was transferred into Muraad's account from his account. In the suit, he had sought for various reliefs including injunction restraining the appellant and his associates from auctioning or entering into the suit premises, a declaration that the contract was void ab initio and unenforceable, specific and general damages. In their joint written statement of defence and in the evidence in court by the sole defence witness one Willard Mbando, a Loan Supervisor/Manager of the appellant, the respondent's claims were strongly denied claiming that at the close of business, the respondent's outstanding balance with DTB had swollen to the tune of TZS 115,411,243. As for Muraad's involvement, they claimed that it was the respondent who took him to the appellant and requested the appellant to

stand as a guarantor for the said loan to be advanced to him by Muraad which they did agree and the two entered into an agreement. Regarding transfer of money from the respondent's account, the appellant claimed that it could not be effected without the respondent's consent and by filling and signing a prescribed fund transfer form. They denied coercing the respondent to apply or enter into the loan agreement. They finally prayed the suit to be dismissed with costs. From the parties' pleadings, 13 issues were drawn and agreed by the parties and the court to guide the parties during the trial. After hearing the parties and their respective witnesses, the High Court rendered its decision partly in favour of the respondent. It declared the loan agreement void ab initio and unenforceable and awarded the respondent TZS 70.000.000.00 as general damages for pains arising from psychological torture due to business failure, risks of loss of collaterals mortgaged to secure the loan and loan issues to attend. It also granted the prayer for injunction. It refused to grant specific damages of TZS 200,000.00 per day for failure to conduct business for want of proof, disbursement of TZS 150.000.000.00 loan amount, TZS 52,416,557.00 as difference between the loan outstanding at DTB and the amount paid by the appellant for settlement of the DTB loan for being unfounded.

In respect of the contract between the respondent and Muraad, the learned High Court Judge discussed it briefly but refrained from making a decision as he was not impleaded and that the loan agreement between the respondent and the appellant was different from that one between the respondent and Muraad. The findings by the High Court aggrieved the appellant. She now seeks to challenge the same vide eight (8) complaints contained in the memorandum of appeal as hereunder: - "1. That, the Honourable tria lJudge erred in law and fact fo r holding that the respondent herein has proved his case on the balance o f probability (standard required in civ il cases). 2. That, the Honourable tria l Judge erred in taw and fact fo r holding that the officers o f the appellant went out o f their professional lim its and act as brokers to customers in need o f loan. 3. That, the Honourable trial Judge erred in law and fact for attaching evidential weight on annexures which were not tendered and adm itted in court. 4. That, the Honourable tria l Judge erred in law and fact for finding that the respondent was given loan from Muraad A l atas without evaluating properly evidence before it 5. That, the Honourable the trial Judge erred in law and fact fo r holding that the loan agreement "Exhibit P 2 "is unenforceable.

6. That, the Honourable tria lJudge erred in law and fact fo r holding that appellant has no right to initiate recovery procedures o f loan issued to the respondent upon default on part o f the respondent 7., That, the Honourable trialJudge erred in law and fact for holding that the appellant herein has breached the terms o f the loan agreement, Exhibit P2.
7. That, the Honourable trialJudge erred in law and fact in awarding genera! damages basing in irrelevant and unsubstantiated factors." The appeal was argued before us by Mr. Nkumule Simon Yongolo assisted by Mr. Francis Steven, both learned counsel, on behalf of the appellant and Mr. Deus Nyabiri, learned counsel, for the respondent. Both parties, in terms of Rule 106(1) and (2) and 34(1) and ((3) of the-Tanzania Court of Appeal Rules, 2009 (the Rules), respectively, lodged in Court written submissions in support of the appeal and reply submission. Also, in terms of rule 34(1) and (3) of the Rules, the appellant filed a list of authorities while the respondent did hot. Grounds 1, 5, 6 and 7 of appeal were conjointly submitted by the appellant on a heading that the respondent did not prove his case on the balance of probability. The appellant, in the submission, agreed with the learned trial Judge's holding that, the respondent did not prove his case for failure to produce a bank statement to prove that the appellant

deposited TZS 115,622,975.00 into the respondent's account. But, she further submitted, the respondent contradicted himself on the amount paid to the DTB from his account in that while in paragraph 9 of the plaint he said TZS 119,416,557.27 were paid to DTB, during his evidence in court and during cross-examination he maintained that TZS 121,516,557.27 were paid to DTB by the appellant from his account. On the part of the appellant, it was argued that DW1, in his testimony, confused between the amount paid to DTB which he said was TZS 115,411,243.00 which was actually the DTB outstanding balance as pleaded in paragraph 7 of the written statement of defence. The trial Judge is also faulted for shifting the burden of proof to the appellant in the determination of the amount paid to DTB. The argument was therefore that the respondent had failed to establish by evidence whether it was TZS 119,416,557.27 as pleaded in paragraph 9 of the plaint, TZS 115,411,243 as framed in the 2n d issue or TZS 121,516,557.27 testified in court which was deposited into the respondent's account. It was the appellant's contention that such controversy would be resolved by the respondent producing a bank statement of his account which he failed pointing to the wording of section 61 of the Evidence Act, Cap 6 (the EA). Elaborating on the above in Court, Mr. Yongolo was adamant that the issue as to how much was disbursed to the respondent and how much

was paid to DTB could only be properly determined if the respondent had produced in evidence the bank statement of his account, which he failed, hence the claims could not stand as they remained unproved. On his part, Mr. Nyabiri was brief in his submissions that the suit revolved around non-compliance of the appellant with the terms of the loan agreement to which DW1 admitted at page 168 of the record. Irrespective of what amount was paid to DTB by the appellant between TZS 119,416,557.27 pleaded in the plaint or TZS 121,516,557.27 testified in court by the respondent, he argued that the fact remained that the respondent's complaint was that the appellant had paid DTB an amount more than TZS 67,000,000.00 and TZS 86,900.00 was not paid into his account as was agreed in the loan agreement (exhibit P2) which amounted to a breach of the agreement. With insistence, he argued that although the respondent's attempt to tender the bank statement of his account was successfully objected to by the appellant during trial, which now appears necessary by the appellant, yet the pleadings and evidence on record, carefully examined, provide for the truth as revealed at page 189. In respect of the respondent being awarded general damages, Mr. Nyabiri argued that, as there was breach of contract, the respondent was, in terms of section 73 of the Law of Contract Act (the LCA), entitled to damages.

In his rejoinder submissions, Mr. Yongolo had nothing different from what he had already argued in respect of failure to prove the claims. He rejoined on other aspects of the case as shall be told latter in this judgment. In our deliberation, we came to realize that determination of this ground is crucial before we determine the other grounds of appeal. Its finding will form the basis of the findings of other complaints by the appellant in this appeal. While the appellant and Mr. Yongolo discussed grounds 1, 5, 6 and 7 as revolving on the proof of the claims, we think, more crucial here is whether there was enough evidence establishing that there was breach of the terms of the loan agreement and the consequences thereof as Mr. Nyabiri rightly argued. We shall therefore start by considering whether there was breach of the terms of the loan agreement which was tendered and admitted as exhibit P2. We shall therefore, interchangeably, refer to it as either a loan agreement or exhibit P2. In doing so we shall be guided by the parties' pleadings and the principles governing the same, evidence on record, the statutory laws, in particular, the LCA and the Court' decisions. We are also mindful of the legal position we reiterated in Abdallah Athumani @ Dulla v. Republic, Criminal Appeal No. 434 of 2018 (unreported) citing the case

of Peters v. Sunday P o st Ltd (1958) E.A.424 that where there is a misdirection or non-direction of the evidence or if the lower court has misapprehended the substance, nature and quality of the evidence, an appellate court is entitled to look at the evidence and make its own findings of fact. We shall therefore exercise such mandate where we shall find it necessary. As our starting point, there is no dispute that the parties entered into a loan agreement (exhibit P2). In paragraphs 7 and 8 of the plaint, the respondent alleged that: - "7. THAT, the 1st Defendant offered the p la in tiff a loan facility fo r the purpose o f taking over the outstanding loan balance a t Diamond Trust Bank (DTB) which was Tshs. 67,000,000/= and Tshs. 86,900,000/= was for buying poly bag and tarpaulin bale from UNYIXUDA IMPORT & EXPORT CO. LTD. ie as working capital. 8. THAT, in the letter o f offer it was agreed that Tshs. 8,005729.00 would be recovered directly from the p la in tiffs account in 24 equal installm ents." These facts were not disputed by the appellant, who, in paragraph 6 of the joint written statement of defence, responded thus: -

"6. That, the contents o f paragraphs 7 and 8 o f the Plaint are noted/' Guided by the provisions of Rules 3, 4 and 5 of Order VIII of the Civil Procedure Code, Cap. 33 (the CPC), the appellant (then 1st defendant) was required to specifically deny what the respondent (then plaintiff) had claimed in the plaint, otherwise, the law treats as agreed all facts pleaded in the plaint. Of particular relevance here, is Rule 5 which provides: - "5. Every allegation o f fact in the plaint, if not denied specifically or by necessary im plication, o r stated to be adm itted in the pleading o f the defendant, shall be taken to be adm itted except as against a person under disability. Provide that, the court may in its discretion require any fact so adm itted to be proved otherwise than by such adm ission." The appellant (then defendant), a banking institution, cannot be said and there is no evidence from which it can be said to have been under any disability. By simpiy taking note as she did, the appellant, in law, is taken to have admitted the contents of paragraph 7 and 8 of the plaint. We are therefore entitled to hold that it was not disputed that the parties entered li

into the loan agreement (exhibit P2) on those terms. Both PW1 and DW1, in their respective testimonies in court were in agreement on these facts. The more so, even clauses 1 and 2 of the loan agreement (exhibit P2), which stipulates the purpose for which the loan was granted, states that:- "1. Purpose The facility has been granted as to be utilized fo r a) TZS 67,000,000.00 take over outstanding loan balance a t DTB. b) TZS 86,900,000.00 fo r purchase o f poly bag and Tarpaulin bale from UNYIXUDA IMPORT & EXPORT CO. LIMITED. 2. Amount of Facility and Repayment The maximum amount that w ill be available fo r draw down under the proposed facility shall not exceed the aggregate sum o f Tshs. 150,000,000/= (Tanzania Shillings One Hundred Fifty M illion only). The advance w ill be recovered directly from your operative account in 24 Months equal installm ents o f Tshs. 8,005,729.00 each comprising o fboth principal and interest. You should therefore ensure that your account holds sufficient funds to m eet this obligation."

Neither party denied in the pleadings, during trial and before us being a party to the agreement as they both signed the same. The issue of coercion is therefore not there. It is trite that parties are bound by their own pleadings, [see Maria Amandus Kavishe v. Norah Waziri Mzeru, Civil Appeal No. 365 of 2019 (unreported)]. We now proceed, based on these legal positions, to consider whether there was breach of the above terms of exhibit P2. We start by considering the pleadings of the parties. In this respect, the respondent, under paragraph 9 of the plaint which substantially and exhaustively explains the alleged breach, alleged that: - "9. THAT, contrary to the letter o f offer that was signed by the p la in tiff on 2$* November, 2016, the 1st defendant deposited Tshs. 115,622,975/= only into the plaintiff's accountinstead o f disbursing Tshs. 150,000,000/= and out o f that sum TShs. 119,416,557.27 was paid to Diamond Trust Bank and not Shs. 67,000,000/=. A copy o f the statem ent o faccount is attached and marked as annexureNM4, leave o f the cou rtis craved for the same to form part o f this plaint. The p la in tiff was not inform ed reasons for paying to Diamond Trust bank the amount which was in excess o f the loan amount."

Responding to this allegation, the appellant, under paragraph 7 of the written statement of defence, stated that: - "7. That, the contents o f paragraph 9 o f the plain t are without m erit hence vehemently disputed, the p la in tiff is put to strict proof thereof. The 1st defendant avers that the outstanding balance from Diamond Trust Bank as at dose o f business day on 22nd November, 2015 was accrued to the tune o f Tshs. 115,411,243, balance plus interest varied as o f date o f settlem ent o f the advanced facility. A letter from Diamond Trust Bank to Equity Bank (T) Ltd dated 2 J d November, 2015 with reference no. DTB/CD/4422/2015 is herewith attached and marked as annexure EQBL1, leave o f the honourable court is craved for the same to form part o f this written statem ent o f defence." It is vivid on the record of appeal that production as evidence of the respondent's bank statement was successfully objected to by the appellant hence it was not received as evidence. Worse still, even the appellant was not ready to produce it in evidence. Much as we entirely agree with the appellant and the submission by Mr. Yongolo before us that the presence of the bank statement would have assisted the respondent to clearly show the bank transactions in his account which view was contradicted by Mr. Nyabiri, yet we do not find it difficult to 14

determine the appeal based on the available pleadings and evidence by the parties on the record of appeal. We acknowledge, upon perusal of the record of appeal that, in his evidence in court, the respondent, at page 168 of the record of appeal, said that the appellant took themselves to pay DTB TZS 121,516,557.27 as opposed to TZS 119,416,557.27 he pleaded under paragraph 9 of the plaint. By this evidence, the appellant contends that the respondent was contradictory hence failed to prove his claims. As revealed above, we agree with the, appellant's submissions and Mr. Yongolo's arguments before us that TZS 121,516,557.27 was not pleaded by the respondent in his plaint. But the law on pleadings is clear that a party is not permitted to lead evidence which is not in conformity with the pleadings. In the event it happens, as herein, the trial court was required to disregard such evidence for a reason that such evidence is inadmissible. The Court restated the position in the case of Maria Amandus Kavishe v. Norah Waziri Mzeru (supra) where the Court remarked: - W e also feel compelled, a t this point, to restate the time honoured principle o f law that p a rtie s a re bound b y th e ir ow n p le a d in g s an d th e y can n o t be a llo w e d to ra ise a d iffe re n t m a tte r w ith o u t am endm ents bein g p rop erty m ade. That, no p a rty sh o u ld be a llo w e d to d e p a rt from h is 15

p le a d in g s th ereb y changing h is case from w hich h e h a d o rig in a lly pleaded. Furthermore, the court its e lf is as bound by the pleadings o f the parties as they are themselves - see fo r instance the cases o f Jam es Funke G w agifo v. A tto rn e y G eneraI [2004] T.LR 161, C ooper M o to rs C orporation (T ) L td v. A ru sh a In te rn a tio n a l C onference C entre [1991] T.LR 165 and B a rcla y s B an k (T ) L td v. Jacob M uro, C ivil Appeal No. 357 o f 2019 (unreported)." (Emphasis added) On the authority, PW l's evidence in court which changed the amount allegedly paid by the appellant to DTB without having sought and granted leave to amend the pleading in paragraph 9 of the plaint was inadmissible and the trial court ought to have disregarded the same. With this stance of the law, what is the position in this case. The appellant's submissions and Mr. Yongolo's argument before us insisted that it was the duty of the respondent to prove his claims at the balance of probability. We agree with him and that legal position was not contested by Mr. Nyabiri. This is not, at all, a virgin area as that duty has been expounded by the Court time and again. We, again, find guidance in the Court's decision in Maria Amandus Kavishe v. Norah Waziri

Mzeru (supra). In that case the Court pronounced itself on the issue of burden of proof in civil cases thus: - "We seek inspiration from the extract in Sarkar's Laws o f Evidence, 18th Edition M .C. S a rka r, S.C. S a rk a r an d P.C, S arkar, published by LexisNexis and cited in P a u lin a Sam son N daw avya v. T heresia Thom asi M adaha, C ivil Appeal No. 45 o f 2017 (unreported), that: "...th e burden o f p ro vin g a fa c t re s t on the p a rty w ho su b sta n tia lly a sse rts th e a ffirm a tiv e o f th e issu e an d n o t upon th e p a rty w ho d en ies it; fo r n eg ative is u su a lly in ca p a b le o f p ro o f. It is ancient rule founded on consideration o f good sense and should not be departed from without strong reason..., U ntil such burden is discharged the other party is not required to be called upon to prove his case. The C o u rt h as to exam ine a s to w hether th e person upon whom th e burden lie s h as been a b le to d isch arg e h is burden. U n til he a rriv e s a t such a con clu sion , h e can n o t p roceed on th e b a sis o f w eakness o f th e o th e r p a rty... "[Emphasis added]. In the instant appeal, no doubt, the respondent was duty bound to prove his claims in the plaint. But, we must add that, such duty arises

where the other party, as stated in the quoted excerpt, denies the claims or facts. We have taken pain to reproduce the parties' pleadings in respect of the claims for a reason. Both, in the written submissions in support of the appeal and before us, Mr. Yongolo pressed that the respondent failed to prove his claims. But we have, above reproduced the provisions of Rules 3, 4 and 5 of Order VIII of the CPC which requires a defendant denying a certain fact in the plaint to do so specifically and categorically. Before us Mr. Yongolo tried to convince us to agree with DW l's testimony that TZS 115,441,243.00 was not the amount paid by the appellant to DTB but the balance at the close of business on the respondent's account at DTB. We agree as that is plain from this statement in paragraph 7 of the joint written statement of defence: - "...7776 1st defendant avers that the outstanding balance from Diamond Trust Bank as a t dose o f business day on 22Pd November, 2015 was accrued to the tune o f Tshs. 115,411,243, balance plus interest varied as o f date o f settlem ent o f the advanced facility..." It follows therefore that, in both the joint written statement of defence and evidence in court, the appellant through the written statement of defence and DW l's testimony, was not ready to disclose the amount paid to DTB from the respondents' account. In terms of Rules 3, 18

4 and 5 of Order VIII of the CPC, it means the respondent's (then plaintiff) allegation under paragraph 9 of the plaint that "...on 20^ November 2016 the 1st defendant deposited Ths. 115,622,975.00 only into the plaintiff's account instead o f disbursing Tshs. 150,000,000.00 as agreed in the loan agreement and out o f that sum Tshs. 119,416,557.27 was paid to Diamond Trust Bank and not Tshs 67,000,000/=" remained not specifically denied. That said, legally speaking, the respondent's allegations under paragraph 9 of the plaint were admitted by the appellant. Had the learned trial Judge addressed himself to the law governing pleadings it would have been easy to realise this. We therefore hold that the plaintiff's claim that the appellant disbursed into the appellant's account only TZS 115,622,975.00 instead of the agreed TZS 150,000,000.00 and that TZS 119,416,557.27 was paid to DTB instead of TZS 67,000,000.00 agreed in exhibit P2 was unchallenged. This was clearly a contravention of clauses 1 and 2 of exhibit P2 hence a breach of the terms of agreement. Before us, Mr. Yongolo, sought refuge under clause 5(II)(e) and 10(b) of exhibit P2 which he argued mandated the appellant to pay to the DTB the amount that would be due. The former clause stipulates that: -

"d) Outstanding loan balance in DIAMOND TRUST BANK w ill be liquidated through this facility to be subm itted for perfection before fu ll drawdown." And, clause 10(b) states: - "b. The lender reserves the right to periodically review the proposed facility and in its sole discretion, without prior notice and a t any time , revise, withdraw, m odify or cancel, in whole or in part, the same whereupon any monies owing under or in respect o f the cancelled facility shall become due and repayable by the borrower to the Lender on demand." With respect to Mr. Yongolo, there is nothing suggesting that these clauses allow liquidation of the respondent's loan at DTB to be paid by the appellant by paying more than or in excess of the agreed TZS 67.000.000.00. A reading of these clauses clearly show that only TZS 67.000.000.00 will be paid to DTB from the facility granted to the respondent. Since exhibit P2 stipulated the manner the money from the facility would be utilised, we find the argument by Mr.Yongolo untenable. Otherwise, the loan agreement entered between the parties which was in a written form for which the terms and conditions thereof did bind the parties to it, legally speaking, could only be varied by another written

agreement (see section 100(1) of the Evidence Act, Cap. 6 (the EA) which did not happen. The loan agreement (exhibit P2), in very clear terms, indicates the manner the reciprocal promises would be performed by the parties thereto that the appellant had to advance or disburse a loan facility of TZS 150.000.000.00 into the respondent's account out of which TZS 67.000.000.00 was to be utilized by the appellant to settle the respondent's outstanding loan with DTB and TZS 86,900,000,00 to be deposited into the respondent's account who was to use it as working capital in buying poly bag and tarpaulin bales. These terms required performance in the manner agreed as the provisions of section 52 of the LCA provide. The section provides that: - "52. Where the order in which reciprocal prom ises are to be perform ed is expressly fixed by the contract, they shall be perform ed in that order; and where the order is not expressly fixed by the contract, they shall be perform ed in that order which the nature o f the transaction requires." Mr. Yongolo's contention may only be valid in the sense that the appellant could not deposit TZS 150,000,000.00 into the respondent's account and then transfer TZS 67,000,000.00 to DTB as that would require the respondents consent by filling transfer form and that the 21

appellant first pays the respondent's outstanding loan with DTB and the remaining amount is deposited in the respondent's account. This condition may be implied from the reading of clause 1 of the loan agreement. But, that clause required the appellant to pay only TZS 67,000,000.00 to DTB and TZS 86,900,000.00 to be deposited into the respondent's account as working capital. If the respondent's outstanding loan with DTB happened to be swollen to whatever amount, the parties had to sit and review the terms of the loan agreement. This was not done hence the validity of the respondent's complaint in paragraph 9 of the plaint that he was not informed by the appellant the reasons for paying DTB an amount in excess of the agreed amount. By doing what the appellant did, it was an obvious breach of the agreement. This takes us to consider what are the consequences of breach of terms of an agreement? The provisions of section 39 of the LCA enlightens the effects as being that where a party to an agreement refuses to perform his part of the. agreement, then the other party is entitled to put to an end the contract. In short, the contract comes to an end. It is rescinded. The section provides: - "39. When a party to a contract has refused to perform , or disabled him self from performing his prom ise in its entirety, the promise may put an end 22

to the contract, unless he has signified, by words or conduct, his acquiescence in its continuance." In both the plaint and his evidence in court, the respondent showed dissatisfaction in the manner the loan agreement was handled by the appellant leading to collapse of his business. He cannot be said to have accepted the situation. The appellant's conduct of not abiding to the terms of the loan agreement, as discussed above, amounted to a total failure to perform her part of the agreement. The contract came to end. In the end and on the basis of the foregoing discussion, we find that the learned trial Judge rightly held that the appellant breached the loan agreement and the respondent proved his claims. Grounds 1, 5, 6 and 7 of appeal fails and we dismiss them. In ground 7 of appeal, the learned trial Judge is specifically being faulted for holding that the appellant herein has breached the terms of the loan agreement, Exhibit P2. In view of the above discussion, we hold that he was justified to hold so. The complaint is without merit and is dismissed. We shall pose here and interject a point that, in view of the above discussion, we have noted nothing that suggests that there was misrepresentation, that the parties were under a mistake of fact when 23

they entered into the agreement or fraud, there was undue influence or the parties agreed to perform an illegal act which would render the loan agreement void ab initio hence unenforceable in terms of sections 20,18, 19 or 24 of the LCA as the learned trial Judge concluded. Instead, the plaint and evidence on record is to the contrary as they show that the parties entered into the agreement voluntarily and for legally accepted purpose, offering a loan on terms as specified in the loan agreement. That said, without hesitation, we hold that the learned trial Judge, who did not even discuss the factors stated under the above provisions, strayed into error to adjudge that the loan agreement is unenforceable. We allow this ground of appeal. Neither from the pleadings and evidence on record, comprehensively considered, stems anything from which it may be concluded that the appellant acted out of their profession. Since the learned trial Judge brilliantly refrained from determining the propriety of the contract between the respondent and Muraad on the basis that the latter was not a party to the suit before him hence he deserved a right to be heard before being condemned, the issue of the appellant acting unprofessional^ by acting as brokers does not arise. We entirely agree with the learned Judge's stance. Grounds 2 and 4 of appeal succeeds and we allow them.

The trial Judge's order awarding damages to the respondent is being challenged in ground 8 of appeal. The appellant contended in the written submissions that the award was made in contravention of law as annexure NM8 relied on was not tendered in court for it to form part of the evidence and that the trial court wrongly considered psychological torture, health problems and reputational loss which were not proved. The case of Cooper Motor Corporation Ltd v. Moshi/Arusha Corporational Health Services [1990] H R 96 was cited to us to underscore the position that, in assessing general damages, the court should not take into account irrelevant factors and wrong principle of law. Annexure NM8 is, according to paragraph 17 of the plaint, a copy of the public notice to auction the respondent's collaterals and NM7 was a copy of demand notice. The respondent gave evidence in chief from page 165 to page 174 of the record of appeal and was cross-examined from page 174 to 177 and re-examined on page 178, but neither of the notices was produced as exhibit. But, as rightly complained, in the trial Judge's judgment at page 336 of the record of appeal, when considering the issue of general damages, the learned trial Judge took cognizant of the demand notice when he said: -

"The court agrees with the p la in tiff that, under the circum stances o f this case, psychological torture is irresistible. The p la in tiff had a succumbing business to think about as w ell as dem and n o tice s an d o th e r p ro tra cte d loan issu e s to a tte n d an d above a ll, the ris k o f lo s s o f c o lla te ra l m ortgaged to th e b an k a s se cu rity fo r the loan . For a ll these unfathomable pains caused to the plaintiff, the court awards the genera! damages to the tune o f Shillings Seventy M illion only (70,000,000/=). "(emphasis added) In terms of Order VIII Rule 7 of the CPC, only a document which has been admitted in evidence or where a copy of it is substituted for the original, shall form part of the record of the suit (see Japan International Cooperation Agency (JICA) vs Khaki Complex Limited (2006) TLR 343), Sabry Hafidh Khalfan vs Zanzibar Telecom Ltd (ZANTEL) Zanzibar, Civil Appeal No. 47 of 2009 and Shemsa Khalfa and Others vs Suleiman Hamed Abdalla, Civil Appeal No. 82 of 2012, (both unreported). Given this settled position, the appellant's grounds 3 and 8 of appeal succeeds and we hold that the learned trial Judge wrongly considered annexure NM8 in the determination of the quantum of general damages to be awarded for breach of the agreement.

Notwithstanding the above, payment of general damages and or compensation is a statutory right in the event it is established that there is breach of contract in terms of sections 73(1) and 75 of the LCA which provides: - "73. -(1) When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation fo r any loss or damage caused to him thereby, which naturally arose from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach o f it 7 5 - A person who rightly rescinds a contract is entitled to compensation fo r any damage which he has sustained through the non-fulfilm ent o f the contract." In the High Court judgment, TZS 70,000,000.00 was awarded as general damages on the basis explained above by the learned trial Judge. There is no clause in the loan agreement which covered the issue of damages payable in the event of breach of the loan agreement. Consequently, general principles governing assessment of general damages applied. Assessment of general damages by courts has been acknowledged to be a difficult exercise. Justice Yaw Appau, Justice of the Court of Appeal, in his Paper on Assessment of Damages presented 27

at Induction Course for Newly Appointed Circuit Judges at the Judicial Training Institute acknowledged that fact and explained the duty of the claimant to lead evidence that would entitle such award in these words: - "Assessment o f Damages is a very wide area o f the law. It is very technical' and covers an im portant area o f civ il litigation where there is an alleged civ il wrong or an Infraction o f the law. It permeates alm ost a ll civ il claim s arising from tort and contract. When a claim fo r damages is included in an action, the p la in tiff or claim ant is required under the law to provide evidence in support o f the claim and to give facts upon which the damages could be assessed. Sim ply put,. before assessment o f damages could be made, the p la in tiff or claim ant m ust first fu rn ish evid ence to warrant the award o f damages. He m ust also p ro vid e fa d s that would form the basis o f assessm ent o f the damages he would be entitled to. H is failure to do so would be fata! to h is claim for damages." Back in our jurisdiction, trite law is that, general damages are normally awarded at the discretion of the trial court and that, an appellate court would be justified to interfere with the assessment of damages by the trial court only where it is established that, the amount awarded was

arrived at based on a wrong principle or the right principle is disregarded. (See Stanbic Bank Limited v. Abercrombie & Kent (T) Limited, Civil Appeal No. 21 of 2001 (unreported). In the instant appeal, in paragraph 23 of the plaint, the respondent alleged failure of his business and in his testimony, in respect of that, he stated the mental agony he underwent through at page 173 and 174 that:- "... I have been psychologically affected. J was not the way I look today. AH the time I think about debts. I cannot do business; the capital has gone. I have also got loss due to collapse o f m y business. I have lo st customers and I have been rendered uncreditworthy." The appellant challenged the award of general damages of TZS 70,000,000.00 in ground 8 simply because the learned trial Judge, among other factors, relied on the public notice to auction the respondents collaterals (annexure NM8) which we have held that it was wrong for not having been tendered and admitted. The causal effect of the public notice would ordinarily lead to loss of customers and being not creditworthy. There were no complaints about other factors considered. Ones reliance on the public notice is disregarded, we think the award of the amount of TZS 70,000,000.00 as general damages was manifestly excessive in 29

relation to the type of injury complained of above and in the circumstances of this case. Instead, we firmly think, an award of TZS 15,000,000.00 (Say Tanzania Shillings Fifteen Million) only represent a reasonable assessment. We hereby therefore quash and set aside the award of TZS 70,000,000.00 and substitute for it TZS 15,000,000.00. Before concluding our deliberation, the circumstances of this case compel us to discuss one crucial issue so as to put things right. Once a contract is rescinded, in terms of section 73(1) of the LCA, neither party has a right to unjustifiably benefit from it. The parties should be restored to their former position (restitution in Integrum). We have held above that the appellant wrongly paid TZS 119,416,557.27 to DTB instead of TZS 67,000,000.00. That means the excess of TZS 52,416,557.27 was wrongly paid by the appellant to DTB. As that was done in contravention of the terms of the loan agreement, we hold it that the appellant paid that excess money at her own peril. It however remains a fact that the appellant parted with TZS 67,000,000.00 paid to DTB to settle the respondent's outstanding loan according to the loan agreement. The respondent had no such money. He therefore benefited from the loan agreement as his loan with DTB was settled by the appellant. The more so, in paragraph 22 of the plaint, the respondent (then plaintiff) alleged that, in servicing the loan with the appellant, he had paid TZS

52,416,557.00 which allegation was denied by the appellant in paragraph 18 of the written statement of defence. But DW1, in his testimony, at page 187 of the record of appeal, admitted that the respondent paid TZS 52,000,000.00. By simple calculation, at the time the contract was rescinded, the appellant had suffered a loss of TZS 15,000,000.00 which, in terms of section 73(1) of the LCA should be restituted to him. In that accord, we order the respondent to pay the appellant TZS 15,000,000.00 (Say Tanzania Shillings Fifteen Million) only. We now turn to the remaining limb in ground 6 of appeal on the right of the appellant to initiate recovery process against the respondent. Having decided as above that the appellant breached the loan agreement leading to it being rescinded, it is obvious now that the appellant has no justification to initiate any recovery procedures. We are alive that under paragraph 18 of the written statement of defence, the appellant alleged that the outstanding amount payable by the respondent to the appellant stood at TZS 198,451,215.00., but, DW1 who testified from page 182 to page 191 of the record of appeal, led no evidence to prove so and neither of the documents tendered as exhibits D1 to D6 substantiated the allegation. The allegation, therefore, remained unproved. Nothing therefore justified recovery procedures being initiated by the appellant against the respondent.

In fine, the appeal succeeds in part as discussed above, otherwise it fails. In the circumstances, each party shall bear its own costs. DATED at DODOMA this 12th day of December, 2024. S. A. LILA JUSTICE OF APPEAL Z. G. MURUKE JUSTICE OF APPEAL G. J. MDEMU JUSTICE OF APPEAL The Judgment delivered this 12th day of December 2024 in the presence of Mr. Francis Steven, learned counsel for the Appellant and Mr. Deus Nyabiri, learned counsel for the Respondent is hereby certified as a true copy of the original. \ o \ W. A. HAMZA it VJPEPUTY REGISTRAR 3 IgijCOURT OF APPEAL I J n !