IN
THE COURT OF APPEAL OF TANZANIA
AT
DAR ES SALAAM
(CORAM: MUNUO,
J.A., KAJI, J.A., AND MJASIRI, J.A.)
CIVIL APPEAL NO. 52 OF 2003
ROCK BEACH HOTEL
LIMITED…………………………APPELLANT
VERSUS
(Appeal
from the decision of the High Court of Tanzania
at Dar es Salaam
(Bwana,
J.)
dated
the 30th day of April, 2003
in
HC. Commercial Case No. 272
of 2002
------------
JUDGMENT OF THE COURT
10 June & 11
September, 2008
MUNUO, J.A.:
In
Commercial Case No. 272 of 2002 in the Commercial Division of the High Court of
Tanzania at Dar es Salaam
“(a) a declaratory order that the defendant
unlawfully impounded the plaintiff’s consignment of steel bars after tax
exemption had been granted;
(b)
Tsh.
362,500,000/= the actual value of the missing steel bars measuring 724.79
metric tons;
(c)
Tsh.
300,000,000/= damages for loss of business as a result of delay caused by the
unlawful impoundment of the steel bars in dispute;
(d)
General
damages;
(e)
Interest
on items (a) and (b) at the bank rate from the date of filing the suit to the
date of judgment;
(f)
Interest
on the decretal amount at the Court’s rate from the date of judgment until
final payment;
(g)
Costs
of the suit; and
(h)
Any
other relief deemed fit by the Court”.
The
defendant denied the claim.
The appellant, Rock Beach Hotel Ltd.
imported steel bars from Cyprus
At the trial, the appellant reiterated
that taxes were duly waived by TIC so the respondent had no cause to impound
the material steel bars. In view of the
unlawful seizure of the steel bars, the respondent should pay for the missing
consignment, the appellant argued.
Two officers of the respondent, DW1
Joyce Sojo and DW2 Sabas Kaileiye, deposed that the steel bars were impounded in situ per Form 89, Exhibit P5
so they were not removed from the storage yards at the National Steel
Corporation, and, or Two Wings Pegasus. In that regard, not being the custodian
of the steel bars, the respondent could not be held liable for loss, the
respondent urged. It was the defence of
the respondent that after impounding the steel bars on suspicion that the
appellant wanted to discreetly sell the consignment to avoid tax payment,
investigations were conducted for about two months without success so the
respondent released the impounded steel bars on two conditions namely: -
“(a) When loading the steel bars for transportation
to Mwanza, the appellant would notify the respondent to supervise the loading.
(b)
On
reaching Mwanza, the appellant would notify the respondent for verification
during off loading”.
The
appellant complied. DW1 and DW2
confirmed the same. The complaint of the
appellant is that the loading and transporting of the steel bars at the yard of
the National Steel Corporation encountered no problems but at the yard of Two
Wings Pegasus, 724.79 metric tons of steel bars were missing so the respondent
should be ordered to compensate the appellant and also pay damages for loss of
business.
Relying on Sections 37 (1) (2) and 38
(1) (2) of the East African Customs and Transfer Tax Act No. 19 of 1977, the
learned judge held that the respondent unlawfully impounded the steel bar
consignment which had been exempted from taxes.
Section 37 gives the respondent
discretion to impound and move impounded goods from a customs warehouse to some
other place. The section provides, inter-alia:
“37
(1) Where under this act any goods are
required to be deposited in a customs warehouse, the proper officer may in his
discretion decide that it is undesirable or inconvenient to deposit such goods
in a customs warehouse and direct that such goods shall be deposited in some
other place; and there upon such goods shall for all purposes be deemed to have
been deposited in a customs warehouse as from the time that they are required
to be so deposited.
(2)
Where
any goods are deemed to have been deposited in a customs warehouse then such
goods shall, in addition to the rent and other charges to which they are liable
under section 36, be chargeable with such expenses incurred in the securing,
guarding and removing of them as the proper officer may consider reasonable and
neither the Commissioner General nor any
officer shall be liable for loss of or damage to such goods which may be
occasioned by reason of their being so deposited and, or dealt with……..”
The
above section should be read together with Section 38 of the said Act which
allows goods liable to import duty to be warehoused without payment of duty by
stating:
“38
(1) Subject to any regulations, goods
liable to import duty may on first importation be warehoused without payment of
duty in a government warehouse or bonded warehouse.
(2)
a
warehouse licensed for the deposit of dutiable goods on which import duty has not
been paid………”
The
steel bars in dispute, the respondent conceded, had been exempted from taxes by
the Tanzania Investment Centre so they were not liable to import duty.
Having found the respondent liable for unlawfully
impounding the steel bars, the learned judge awarded Tsh. 17,500,000/= for loss
of the steel bars stored at Two Wings Pegasus and Tsh. 30,000,000/= damages for
loss of business in that the missing steel bars delayed the reconstruction of
the hotel as scheduled. Not satisfied
with the awarded damages, the appellant lodged the present appeal to seek
enhancement of the Sh. 17,500,000/= award.
The appellant lodged three grounds of
appeal namely:
“1. the learned judge erroneously awarded Tsh
17,500,000/= to the appellant being the value of 25 metric tons only when he
had decided that the respondent was liable for the loss of 724.79 tons of steel
bars which would have entitled their appellant to reimbursement of the value of
the missing steel bars.
2.
The
learned judge erred in law and fact in awarding Tsh. 15,000,000/= only in
favour of the plaintiff/appellant as loss of business an amount which is too
small in the circumstances of the case.
3.
The
learned judge erred in law and fact by failing to accord substantial justice”.
At
the commencement of the hearing, Mr. Ogunde, learned advocate for the
appellant, abandoned ground 2 of the appeal.
Grounds 1 and 3 were argued together.
Contending
that the learned judge should have awarded full compensation in the quantum of
Tsh. 362,500,000/= to cover the loss of the 724.79 missing tons of steel bars,
Mr. Ogunde, learned advocate for appellant complained that the meagre award of
Tsh. 17,500,000/= was inadequate and did not meet the justice of the
matter. He argued that the exhibits
annexed to the plaint fully support the award of Tsh. 362,500,000/= so the
appeal should be allowed with costs.
Mr.
Felix Haule, learned advocate for the respondent, contended that the claim was
not established so the suit ought to have been dismissed with costs. Counsel for the respondent maintained that no
evidence was adduced by the appellant to prove the alleged loss of 724.79 metric
tons of steel bars. The onus, counsel
for the respondent pointed out, was on the appellant to establish on the
balance of probabilities, that 724.79 metric tons of steel bars were stolen
from the yard of Two Wings Pegasus. The
proforma invoice, counsel for the appellant further contended, is not, and
cannot be linked to the 724.79 missing tons of steel bars because the quantum
on the proforma invoice, Exhibit P9 is a mere 35 tons of steel bars. In those circumstances, the suit should have
been dismissed with costs for lack of proof, counsel urged. Furthermore, Mr. Haule observed, the steel
bars in question were impounded in situ
so if there was loss, the custodian should have been held accountable for any
such loss. For lack of proof, the court
should disallow the appeal, the learned State Attorney urged.
The
issues framed at the trial were:
“1. whether the round bars went missing while in
the hands of the defendant.
2. whether the plaintiff is entitled to the
reimbursement of Tsh. 362,500,000/= claimed.
4.
whether
there was any business loss incurred by the plaintiff and whether the same was
occasioned by the defendant.
5.
whether
the plaintiff is entitled to damages from the mental illness (he suffered).
6.
what
reliefs are the parties entitled to?”.
Upon
finding that 724.79 tons were missing, in clear terms meaning that 724.79 tons
of steel bars were stolen from the yard of Two Wings Pegasus, the learned trial
judge, Dr. Bwana, observed:
“All in all, it is a well
settled principle of law that he who claims a refund must show the exact figure
claimed and how he arrived thereto”.
Rightly
placing the onus of proof on the appellant, the learned judge continued:
“It is the duty of the
plaintiff in this case to show exactly how he arrived at the figure of Sh.
362,500,000/=. He has not done so. What is shown as per Exhibit P9, is a sum much
smaller – that is Sh. 17,500,000/=. He
is awarded that sum being reimbursement for the loss of the 724.790 tons of
steel bars”.
In
a nutshell, the learned judge held:
“In conclusion, therefore,
it is my considered view that the defendant’s act of impounding the plaintiff’s
consignment of steel bars was unlawful and unjustifiable. The plaintiff is therefore entitled to
recover from the defendant the sum of Sh. 15,000,000/= as damages. As to the missing steel bars, the defendant
is to reimburse the plaintiff the sum of Sh. 17,500,000/=. For the loss of business, the defendant is to
reimburse the plaintiff the sum of Sh. 30,000,000/=. All the above sums with interest at the court
rate of 7% from the date of this judgment until payment in full. The plaintiff is also awarded costs. It is ordered accordingly”.
The
issue before us is the propriety of the awarded damages.
We carefully scrutinized the original
record and the record of appeal to trace documentary, and, or oral evidence,
substantiating the award Tsh. 17,500,000/= damages for the allegedly stolen
724.79 tons of steel bars. Although a
bulkly 724.79 metric tons of steel bars were allegedly missing from the yard of
Two Wings Pegasus where the appellant had deposited the same for storage, and,
where the respondent’s officers had impounded the same in situ as evidenced by Form 89, Exhibit P5, dated the 1st
October, 2001, no evidence was adduced by the appellant to establish the
quantity of stolen steel bars. Form 89
reads in part:
“Form 89 DEPOSITED INSITU
AT ASHIRA MANDELA ROAD GODOWN ALC.
NOTICE OF GOODS DEPOSITED
IN CUSTOMS WAREHOUSE.
Serial A 0041460
Date of Arrival
1/October/01
Name and Address of
Depositor (in block letters)
TWO WINGS PEGASUS LTD.
P.O. BOX 4134
Reason for Deposit PENDING
PRODUCTION OF CUSTOMS DOCUMENTS.
Description of goods
deposited in the Customs Warehouse at Owner’s Risk.
BEING STEEL BARS OF
DIFFERENT SIZES IN ALMOST 100 (MORE OR LESS) BUNDLES”.
There
is an endorsement at the foot of the Form stating:
“According to the clearing
Agent there are 110 (one hundred and ten) bundles.
Sgd”.
According
to Form 89, one hundred ten bundles of steel bars of different sizes were
deposited at the Two Wings Pegasus warehouse on the 1st October,
2001. The value of 110 bundles of steel
bars is not shown on the Form. The steel
bars were in bundles, their weight was not shown on the material form. Moreover, assuming that the whole consignment
of 110 bundles of steel bars was stolen as alleged by the appellant, such big
looting would normally be reported to the police. In this case, no police report was produced at
the trial or even annexed to the plaint to prove the alleged loss of 110
bundles of steel bars whose value was not disclosed. There is furthermore, no evidence on record
to establish that the 110 steel bars weighed 724.79 tons of steel bars, the
subject of this case.
We are mindful of the care an appeal
court must exercise before interfering with awarded damages. In the case of Cooper Motors Corporation Ltd.
versus Moshi – Arusha Occupational Health Services (1990) TLR 96 the
Court held:
“Whether the assessment of
damages be by a judge or jury, the appellate court is not justified in
substituting a figure of its own for that awarded below simply because it would
have awarded a different figure if it had tried the case………….Before the
appellate Court can properly intervene, it must be satisfied either that the
judge, in assessing the damages, applied a wrong principle of law (as taking
into account some irrelevant factor or leaving out of account some relevant
one); or short of this, that the amount awarded is so inordinately low or so
inordinately high that it must be a wholly erroneous estimate of the damage”.
The
Court allowed the appeal because the trial judge had proceed on the wrong
principle.
We find no evidence to support the award
of Tsh. 17,500,000/= specific damages for the loss of, or part of the
consignment impounded in the yard of Two Wings Pegasus on the 1st
October, 2001. The proforma invoice,
Exh. P9, is not of assistance here because it only reflects the price
estimation of 35 tons of steel bars in the local market at the material
time. The said proforma invoice is not
linked to the alleged theft of 724.79 tons of steel bars, the subject of this
action.
We are furthermore, of the settled mind
that the award of Sh. 30,000,000/= damages for loss of business was not
specifically proved. We are mindful of
the provisions of Section 110 of the Evidence Act, 1967, Cap 6 R.E. 2002 which
places the burden of proof on he who alleges by stating inter-alia:
“110. (1) Whoever
desires any Court to give judgment as to any legal right or liability dependant
on the existence of facts which he asserts must prove that those facts exist.
(2) When a person is bound to prove the existence of any fact, it is
said that the burden of proof lies on that person”.
In this case the appellant had to prove
by documentary or oral evidence that the 110 bundles of steel bars impounded at
the yard of Two Wings Pegasus weighed the alleged 724.79 metric tons in dispute
in this case. The parties conceded that
the 110 bundles of steel bars were impounded in situ, meaning they remained at the Two Wings Pegasus and were
not moved to some other warehouse. That
being the position, the appellant had to disclose in whose charge the steel
bars were at the material yard, whether a guard was assigned to guard the
consignment, and if so, where the particular guard was when the steel bars were
stolen, whether the matter was reported to the police et cetera.
With regard to the law, it is trite law
that specific or special damages as is the case with the theft of alleged
724.79 tons of steel bars and, or, loss of business caused by delay in
supplying steel bars to the contractor for rehabilitating Rock Beach Hotel in
Mwanza, must be specifically, substantiated to justify an award of
damages. The Court held the same in the
case of Tanganyika Bus Service Ltd. versus the National Bus Service Ltd. (1980)
TLR 204 ; Juma Misanya and another versus Ndurumai (1983) TLR 245 and Zuberi
Augustino versus Anicet Mugabe (1992) TLR 137, to name but a few
authorities on specific damages.
In view of the above, we are satisfied
that the learned trial judge proceeded on a wrong principle because there is no
evidence to support the award of specific damages. The Tsh. 15,000,000/= general damages was not
contested by the respondent so we refrain from interfering with the said award
basically because the respondent unlawfully impounded steel bars which had been
lawfully exempted from taxes by the Tanzania Investment Centre. Such impounding, we think, seriously
inconvenienced the appellant. Hence the
award of Tsh. 15,000,000/= general damages was justifiable.
Under the circumstances, we are
constrained to reverse the awards of Tsh. 17,500,000/= and Tsh. 30,000,000/=
for lack of proof.
We
accordingly dismiss the appeal with costs.
DATED at DAR ES SALAAM this 9th
day of September, 2008.
E. N. MUNUO
JUSTICE
OF APPEAL
S. N. KAJI
JUSTICE
OF APPEAL
S. MJASIRI
JUSTICE
OF APPEAL
I certify that this is a true copy of
the original
(S. S. MWANGESI)
Ag.
SENIOR DEPUTY REGISTRAR
COURT
OF APPEAL
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