GEORGE SHAMBWE v NATIONAL PRINTING COMPANY LTD 1995 TLR 262 (CA)

GEORGE SHAMBWE v NATIONAL PRINTING COMPANY LTD 1995 TLR 262 (CA)

Court Court of Appeal - Dar Es Salaam

Judge Omar JJA, Mnzavas JJA and Lubuva JJA D

Civil Appeal No 19 of 1995

October 27, 1995

E (From judgment of the High Court of Tanzania at Dar es Salaam, Mkude, J)

Flynote

Contract - Contract of Sale of Land - Agreement reached but vendor refuses to sign it

despite benefiting from consideration furnished by purchaser - Effect thereof. F

Land law - Disposition of interest in land - Agreement is made but vendor despite

receiving and benefiting from consideration under the agreement, refuses to sign it -

Consent to transfer not sought and obtained from the Commissoner for Lands -

Whether there was a sale agreement - Rule 3 of the Land Regulation. G

-Headnote

After an agreement had been reached between a vendor and purchaser of an interest

in land and after the vendor had benefited from the consideration under the

agreement the vendor refused to sign the written agreement and sought to disown the

agreement altogether. The vendor sued the purchaser claiming vacant H possession

of the suit premises. The vendor argued that there was no agreement because the

consent of the Commissioner for Lands had not been sought and obtained as required

by reg 3(1) of the Land Regulations 1948. The High Court found that there was an

agreement between the vendor and the purchaser, that the vendor had breached that

agreement by his refusal to execute the written agreement and that though

inoperative for lack of approval of the I

1995 TLR p263

LUBUVA JA

Commissioner for Lands the agreement was nevertheless binding as between the A

vendor and the purchaser. The vendor appealed to the Court of Appeal of Tanzania

arguing that there was no agreement of sale of the house.

Held:

(i) On the basis of the evidence there was a concluded agreement for sale

of the house between the appellant and the respondent; B

(ii) It is not correct to say that because the approval of the Commissioner

for Lands had not been obtained therefore there was no agreement of sale between

the appellant and the respondent;

(iii) Though the agreement for sale of the house was inoperative as it was

not C approved by the Commissioner for Lands, it did not also mean that there was

no binding agreement as borne out by the evidence;

(iv) An agreement for disposition of a right of occupancy is inoperative in

the sense that property does not pass unless and until the approval of the

Commissioner for Lands is obtained.

(v) Having breached the agreement the appellant cannot validly resort to

reg 3(1) of the Land Regulations, 1948 in defence; D

Case Infomation

Appeal dismissed.

Cases referred to:

(1) Peter Karanti and 48 others v. Attorney General Civil Appeal No 3 of 1988

(unreported) E

(2) J M Kasuka v. George Humba, Civil Appeal No 35 of 1990

(3) Millen Richard v. Ayub Hoza [1992] TLR 385

(4) Fazal Kassam v A N Kassam [1960] EA 1042

Semgalawe for the appellant. F

Maira for the respondent.

[zJDz]Judgment

Lubuva JA delivered the following considered judgment of the Court: G

This appeal arises from the decision of the High Court (Mkude, J) in Civil Case No 123

of 1990. In that case the plaintiff, George Shambwe (hereinafter called the appellant)

had instituted a suit against the defendant, the National Printing Company Limited

(hereinafter called the respondent) seeking among other reliefs, H a declaratory

judgment that the sale agreement between the appellant and the respondent for the

purchase of the house was inoperative and an order for vacant possession of the suit

premises by the respondent.

The background to the case is simple and the facts are also not disputed. The appellant

owned a house on Plot No 86 Wakulima I

1995 TLR p264

LUBUVA JA

A Road, Kinondoni District within the City of Dar es Salaam. The house was

mortgaged to the National Bank of Commerce as security for the loan which the

appellant had raised from the bank. For the initial period up to 30 July 1987 the

respondent/defendant had rented the house from the appellant/plaintiff. While still B

in occupation of the house under the rental arrangement, the respondent expressed

his interest to purchase the house from the owner, the appellant. Negotiations started

and it was agreed that the purchase price for the house would be Shs 850,000/=. It was

further agreed that the respondent would pay part of the C purchase price to the

National Bank of Commerce in order to redeem the mortgage and the balance of Shs

143,000/= to be paid to the appellant through his lawyers M/S Kijugo and Company,

Advocates, who, it was intended would settle the appellant's other financial

commitments. On the other hand, for the purpose of effecting the sale transaction of

the house, the defendant company had sought the services of the Tanzania Legal

Corporation. D

It is apparent, however, that though the respondent company had as agreed paid

certain sums of money towards the redemption of the appellant's mortgage, the

mortgage still remained unredeemed at Shs 483,631/= by December 1989. In E these

circumstances, the appellant decided to redeem the mortgage directly. With the

assistance of his wife, the appellant paid to the National Bank of Commerce Shs

455,000/=. The respondent was notified by letter from the appellant that whatever

amount of money the respondent had paid to the bank would be treated as rent for

the period that the respondent had occupied the house. This, it appears F sparked off

controversy between the appellant and the respondent over the house in dispute. The

appellant was pressing for the respondent to vacate the house in which he wanted to

effect repair works. On the other hand, the G respondent was refusing to vacate the

house for which he was demanding the plaintiff to effect the transfer in terms of the

sale agreement. Before the High Court at Dar es Salaam, as indicated, the

appellant/plaintiff instituted a suit against the respondent company. The learned Trial

Judge dismissed the suit with costs to the defendant. Aggrieved by that decision, the

appellant has appealed to this Court. H

Mr Semgalawe, learned advocate for the appellant has filed and argued the following

two grounds of appeal:

'1. That the trial Honourable Judge erred in law in holding that the

appellant was in breach of the sale agreement, which I

1995 TLR p265

LUBUVA JA

agreement was not executed, and consented to by the Commissioner

for Lands. A

2. That the Honourable Judge erred in law in not granting reliefs sought

by the appellant because he found it would be inequitable to grant reliefs as the

appellant was in breach of the sale agreement.' B

Arguing on ground one before us, Mr Semgalawe, learned Counsel was brief but

pertinent, He strongly criticized the learned Trial Judge in holding that the appellant

was in breach of the sale agreement. Learned Counsel took the view that the decision

of the matter depended on the law governing the deposition of a right of occupancy as

provided in the Land Regulations 1948. C

Repeating the appellant's argument before the High Court, learned Counsel submitted

that in terms of reg 3(1) of the Land Regulation 1948 a disposition of a Right of

Occupancy is inoperative if it is not in writing and is not approved by the D

Commissioner for Lands. In support of this proposition, Mr Semgalawe referred us to

the decided cases listed at page 94 of the proceedings which among others include our

decision in Peter Karanti and 48 Others v Attorney General (1), J M Kasuka v George

Humba (2) and Millen Richard v Ayub Hoza (3). On the basis of reg 3(1) and the fact

that the Commissioner for Lands had not approved the E disposition, Mr Semgalawe

maintained there was no agreement which the appellant was held by the learned

Trial Judge to have breached. Alternatively, it was Mr Semgalawe's submission that if

there was such an agreement, it was not legally enforceable. This aspect, the learned

Counsel asserted, was not taken into account properly by the learned judge. F

Mr Maira, learned Counsel for the respondent, submitted that the learned Trial

Judge's decision could not, in the circumstances of the case be faulted. Elaborating on

this, Mr Maira referred to the time-honoured maxim 'he who resorts G to equity

must come with clean hands'. He submitted that it would be inequitable, unjust and

repugnant to justice to sustain the appellant's appeal because his case was fraught with

fraud which was admitted by the appellant at page 58 of the proceedings. He also

submitted that having regard to the H background of the case as a whole, it was clear

that the appellant and the respondent had entered into a sale agreement which was

legally binding upon them. That on the basis of the agreement, there was

consideration from the respondent which the appellant benefited, i.e. the appellant

had his mortgage with the National Bank of Commerce satisfied as the respondent

effected I

1995 TLR p266

LUBUVA JA

A the payment for the sale price to the bank (NBC) as agreed. It was Mr Maira's

further submission that the appellant should not be allowed to benefit from his own

breach which resulted in the breach of the sale agreement when the respondent had

complied with the terms of the agreement. In conclusion, Mr Maira argued that B by

refusing to sign the sale agreement, the approval of the Commissioner for Lands could

not be obtained as there was no executed legal document upon which such approval

could be sought.

C We have given anxious and close consideration to these submissions. It is our

considered view that the decision of this case turns around a narrow issue. That is,

whether there was an agreement which was breached by the appellant/plaintiff. With

respect, we agree with Mr Maira, learned Counsel for the respondent, that in order to

determine the issue concerning the agreement, it is necessary to take full D account

of the historical background and circumstances of the case. As already indicated, it is

common ground that the appellant and the respondent had come to an agreement to

have the appellant's house purchased by the respondent. That it was agreed that out

of the purchase price of Shs 850,000/= part of it was to be E paid to the National

Bank of Commerce in order to redeem the appellant's mortgage and the balance was

to be paid to the appellant's through his lawyer M/S Kijugo and Company advocates.

The issue as raised by Mr Semgalawe, learned Counsel for the appellant, is that there

was no binding agreement because the approval of the Commissioner for Lands was

not obtained after the initial F agreement between the appellant and the respondent.

Mr Maira, on the other hand ardently submitted that the appellant was in breach of

the sale agreement.

G In order to have a clear picture of the historical background to the case we deem

it appropriate to closely examine the following documents on record. First, there is

the letter of 11 November 1986 which was addressed to M/S Kijugo and Company,

advocates for the appellant, by the Tanzania Legal Corporation, on behalf of the

respondent. With that letter, three copies of the sale agreement were enclosed for

execution by the appellant. The appellant was required to return the H copies of the

sale agreement after signing for further processing and Capital Gains Tax assessment.

With this, as indicated earlier, the appellant did not comply. There is also the letter of

28 July 1988 addressed to the Chief Corporation Counsel by the appellant's advocates,

M/S Kijugo and Company, Advocates. In that letter it is clearly stated that there was

an agreement between I

1995 TLR p267

LUBUVA JA

the appellant and the respondent regarding the sale of the house and the A

conveyancing process that was being handled by the Tanzania Legal Corporation. It is

also indicated in the letter that any balance of the purchase price was to be paid to the

advocate in order to settle the vendor's (appellant) other liabilities. Then there is the

letter of 28 February 1990 exhibit D6 written to the NBC by M/S Kijugo B and

Company, advocates for the respondent in connection with the sale of the house and

the outstanding balance on the mortgage. In it is shown that the respondent had at 5

September 1985 paid Shs 540,000/= for the mortgaged amount of Shs 593,407/50=.

Specifically, the respondent's advocates request for C a statement of account on the

mortgage so that 'we may pay the balance of the amount owing including interest in

order that the mortgage could be discharged in our favour'. On these facts, which are

not disputed, it seems clear to us that an agreement for the sale of the house had been

reached between the appellant and the respondent. Following on the agreement, the

various correspondences D including the letters referred above ensued. They all

refer to an existing agreement which the parties, i.e. the appellant and the

respondent, had entered.

On the basis of this evidence, we are satisfied that the learned Trial Judge was entitled

to the conclusion that there was a concluded agreement for sale between E the

appellant and the respondent. The evidence was duly considered. With respect, we

are unable to accept Mr Semgalawe's argument that there was no binding agreement

because the Commissioner for Lands had not sanctioned the sale transaction. We

agree with Mr Semgalawe's statement that under the Land F Regulations 1948 the

sale agreement was inoperative, as the correct position of the law on this point.

Needless to labour more on it, suffice it to say that the cases cited by the appellant at

the hearing of this appeal and the trial Court, have among other points underscored

this position of the law. That list of authorities includes the decision of this Court in J

M Kasuka v George Humba (2) and Millen Richard v Ayub Hoza (3). G

However, though it is the position of the law on this point, we wish to make it clear

that Mr Semgalawe, learned Counsel, is not with respect correct in his assertion that

because the approval of the Commissioner for Lands was not forthcoming H there

was therefore no agreement of sale between the appellant and the respondent. This is

so because, in the instant case though the agreement for sale of the house was

inoperative as it was not approved by the Commissioner for Lands, it did not also

mean that there was no binding agreement as borne out by the evidence. In our

understand- I

1995 TLR p268

LUBUVA JA

A ing an agreement for a disposition of a right of occupancy is inoperative in the

sense that property does not pass unless and until the approval of the Commissioner

for Lands is obtained. In this sense, being inoperative, and as we stated in the case of J

M Kasuka v George Humba (supra), where a disposition is B inoperative by virtue of

reg 3(1) it is void ab initio, and, therefore all the terms of the agreement to the

disposition are void and therefore unenforceable. In the instant case, the situation is

distinguishable. The learned Trial Judge correctly took the view that the appellant,

the vendor was in breach of the agreement even though the approval of the

Commissioner had not been obtained, In his judgment, the learned judge stated: C

'The position as it is now is that it is the vendor who is guilty of breach of

contract by refusing to sign the sale agreement. The reason he has given for not

signing the agreement is a lame excuse which he has concocted against his agreement

with the purchaser/defendant. By D refusing to sign the agreement and return it to

M/S Tanzania Legal Corporation for further processing to its logical conclusion he has

brought everything to a stand still. It would be letting the plaintiff benefit from his

own breach to give (L) (sic) him the remedies he is seeking....' E

From this, it is crystal clear that in this case, unlike the situation obtaining in the case

of J M Kasuka v George Humba (supra) and Fazal Kassam v A N Kassam (4) an

agreement for sale had been reached prior to the stage when the F Commissioner's

approval was to be sought. As found by the learned judge, it was at the stage when the

appellant was required to execute the sale agreement that he refused to sign the

document. With this refusal to sign, nothing further could be done in executing the

sale agreement. As a result, the approval of the G Commissioner could not be

obtained. For that reason, we agree with the learned Trial Judge that the appellant

was in breach of the sale agreement reached between him and the respondent, the

buyer. Having breached the agreement in these circumstances, the appellant cannot

validly resort to reg 3(1) of the Land Regulations 1948 in defence. The

Commissioner's approval is sought after all the H initial formalities including the

signing of the sale agreement are completed. Due to the appellant's conduct,

execution formalities could not be accomplished and the Commissioner's approval

could not be obtained. It is our considered view that the learned judge's finding that

the appellant had breached the agreement was justified. Therefore, ground one fails. I

1995 TLR p269

LUBUVA JA

Before dealing with the next ground, we wish to make brief mention of an aspect A

which was raised by Mr Maira, learned Counsel for the respondent. This he did when

he was addressing on ground one. As already pointed out, Mr Maira had submitted

that the appellant's appeal should not be entertained because the appellant did not

come to seek justice with clean hands. He referred to page 58 of B the proceedings in

which the appellant had admitted to have told lies in court. On record, the appellant

had stated:

'I wrote a personal letter to Mr Kusaga, the NPC GM on 2/4/85 in which I said

I had signed the agreement. By this time I had not signed the agreement so I lied to

Mr Kusaga because I was in a hurry.' C

During the hearing of the appeal, at the prompting of the Court, Mr Maira, learned

Counsel correctly in our view, did not press any further on the issue of fraud. This is

because it is common knowledge that as the issue of fraud was not raised in the

pleadings, that issue was never before the High Court. With respect, we find D no

basis upon which this court as an appellate Court could entertain at this stage the

issue of fraud.

We come to the last ground of appeal i.e. ground two. This ground is closely linked E

with ground one. Under this ground, the appellant seeks to fault the Trial Judge for

not granting the reliefs sought. Arguing this ground, Mr Semgalawe briefly reiterated

his arguments in support of ground one, Essentially, it was his submission that there

was no legally binding agreement which could be enforced against the appellant. He

urged that in the absence of an enforceable agreement F the Trial Judge should have

granted the reliefs sought by the appellant. Having taken the view that the appellant

was in breach of the sale agreement, we think it is unnecessary to go any further into

this matter. The reliefs sought were based on whether or not there was a breach of

the agreement. This ground also fails. G

As the relief sought at the trial was a declaratory judgment that the agreement was

inoperative, and as there was no counter-claim filed by the respondent for specific

performance or damages, the learned Trial Judge correctly made no further orders.

The respondent having spent sums of money towards the redemption of H the

mortgage and other liabilities of the appellant, the matter is left open for further

processing and execution of the documents in order to effect the transfer in terms of

the law.

In the event, the appeal is dismissed with costs to the respondent. I

1995 TLR p270

A