The learned trial Judge dismissed the suit with costs. She allowed the counter-claim
with costs. Dissatisfied with the decision of the trial court, the appellant plaintiff, through the services of Mr. Mbuna, learned
advocate filed the present appeal to challenge the decision of the High Court. In the High Court Mr. Mchome, learned advocate from
Mbuna & Co. Advocates prosecuted the suit which had been instituted by Mr. Kiwango, learned advocate. The present appeal was
prosecuted by Mr. Mujulizi, learned advocate. Mrs. Bade and Mr. B. Chipeta, learned advocates, defended the suit in the High Court.
Mr. W. Chipeta, learned advocate, represented the respondent in this appeal.
Although the learned Judge erroneously held that there was no contract of sale of
petroleum products between the parties, a careful scrutiny of the evidence, conduct of the parties and the circumstances of the case
established that there was an oral contract of sale of petroleum products by the appellant plaintiff company to the respondent defendant
company. Under the said oral contract of sale of petroleum products, the appellant claimed that it supplied petroleum products valued
at US Dollars 197,216.65 and Tsh 125,323,369.65 to the respondent company which supplies had not been paid for giving rise to the
suit.
Denying the claim for unpaid supplies of petroleum products, the respondent counter-claimed
for US Dollars 65,361,737.89 and interest thereon at US Dollars 460,998.65, deposited credit for which the appellant had not delivered
petroleum products.
Dismissing the suit, the learned Judge held:
--- Again PW1 talked of payment being made after supply of products, followed by raising invoices. Yet there was no evidence of any
credit arrangement between the parties. DW2 said the transactions between the parties were not carried out on credit arrangements.
As already stated there is nothing relevant on the delivery notes and invoices linking
them with proof of the plaintifffs case.
From the evidence on record, I make a finding that the plaintiff has not only failed to prove existence of any agreement but it has
also failed to prove that in their business transactions there were products which were supplied to the defendant and the defendant
failed to make payment. The plaintifffs case is dismissed with costs.
The learned trial Judge had the following to say on the counter-claim:
The defence evidence (DW1) as corroborated by DW2 and also PW2 was that the defendant asked for statements of their Accounts as per
Exhibit D2. A reconciliation of the final collection and deposits made to the plaintiff reflected a credit balance in favour of the
defendant. The statements were for 31st December 2000. The statements were tendered in Court and admitted as Exhibit D3. Account No. 2032 shows a credit balance of Tsh 54,468,114.91.
Account No. Y032 shows a credit balance of US Dollars 460,998.43. There was no other transaction between the parties after 31st December, 2000 ---
The learned Judge further held:
Indeed the statement for Account No. 2032 has entries for unapplied cash, all of them totaling 54,468,114.91. For Account No. Y032
there are six entries of unpaid cash and the total is US Dollars 460,998. For Account No. X001 the credit balance is 0.
The learned trial Judge concluded:
The assessment carries me to a conclusion --- the defendant paid to the plaintiff an excess amount of (a) US Dollars 460,988 and Tsh
54,468,114.91 as reflected by Exhibit D3 --- Thus while the plaintiff failed totally to prove its case, the defendant managed to
prove the counter-claim on a balance of probabilities as required by the law. I will thus enter judgement for the defendant on the
counter-claim as prayed for with costs.
Challenging the decision of the High Court, the appellant filed five grounds of appeal.
At the hearing, counsel for the appellant abandoned grounds 3 and 5.
Submitting on ground one of the appeal, counsel for the appellant faulted the learned
Judge for framing wrong issues, contending that issue one ought not to have been included. Inclusion of issue one, counsel contended,
caused the learned Judge to misdirect herself and hence erroneously finding that ?
The defendant denied the existence of the agreement.
Counsel asserted that the said finding is incorrect because nowhere in the Written
Statement of Defence did the respondent deny the existence of the agreement of sale of petroleum products by the plaintiff to the
respondent. The trial court therefore erroneously held that ?
--- from the evidence of both sides --- there was only a business arrangement between the parties ---
Counsel for the appellant maintained that framing issues wrongly led to wrong findings
which in turn occasioned a failure of justice. Claiming that the trial was unfair and flawed by including issue one among the issues
for determination, counsel for the appellant urged us to rectify the irregularity by nullifying the proceedings, judgement and decree
and ordering a retrial.
On ground two of the appeal, counsel for the appellant contended that PW1 and PW2
established that the parties had a running account. He conceded, however, that the evidence adduced by these two witnesses for the
appellant, fell short of proving the appellants case on the balance of probabilities because no invoices, and, or delivery notes
were tendered to substantiate the claim for unpaid for supplies of petroleum products.
With regard to the award of interest on the counter-claim, counsel for the appellant
contended that the said award of interest was unjustified for the reason that it was not proved that the sale agreement provided
for payment of interest. Counsel for the appellant prayed that the appeal be allowed with costs.
Mr. W. Chipeta, learned counsel for the respondent urged us to uphold the issues
which were framed by trial Judge initially Nsekela, J. as he then was, because he framed the issues with the assistance of counsel
for the parties so no injustice was occasioned to either party and as such there is no need for a retrial.
Contending that the decision appealed against is strongly supported by the evidence
on record, counsel for the respondent observed that although PW1 said there was a sale agreement and was given an opportunity to
produce the alleged agreement at the trial, no such agreement was forthcoming. On the contrary, counsel for the respondent pointed
out, the respondent tendered statement of accounts Exhibit D3 to substantiate the counter-claim which the trial court rightly allowed
because it was proved on the balance of probabilities.
Counsel for the respondent further urged the Court to uphold the interest on the
counter-claim because Section 29 of the Civil Procedure Code, 1966, allows the Court to award interest on monetary debts. He prayed
that the appeal be dismissed for lack of merit.
We shall determine three issues in this appeal namely ?
1.
whether issue one in the trial occasioned a failure of justice;
2.
whether the appellant plaintiff proved its claim of unpaid for petroleum products supplied to the respondent; and
3.
the propriety of the award of interest on the counter-claim.
We need not be detained on the matter of issues framed at the commencement of the
trial because the said issues were framed in compliance with the provisions of Order XIV Rule 3 of the Civil Procedure Code, 1966
which states, inter alia:
4.
The Court may frame issues from all or any of the following materials:
(a)
allegations made on oath by the parties, or by any persons present on their behalf, or made by the advocates of such parties;
(b)
allegations made in the pleadings or in answers to interrogatories delivered in the suit;
(c)
the contents of documents produced by either party.
The record shows that the issues were framed with the assistance of counsel for either
party and that the said issues arise from the pleadings. The complained of issue one which is alleged to have occasioned a failure
of justice reads:
(1)
whether or not there was an agreement between the plaintiff and the defendant under which the plaintiff
undertook to sell petroleum products to the defendant.
We think the said issue one is material because it is the foundation of the sale
of petroleum products by the appellant plaintiff to the respondent purchaser. The sale agreement, we hasten to say, falls under the
provisions of Section 3 (1) of the Sale of Goods Act, Cap. 214 which states:
3 (1)
A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property
in goods to the buyer for a money consideration called price, and there may be a contract of sale between on part owner and another.
We are reinforced in this view by the provisions of Section 5 (1) of the Sale of
Goods Act, Cap. 214 which states:
5 (1)
Subject to the provisions of this Act and of any other written law in that behalf, a contract of sale may
be made in writing (either with or without seal) or by word of mouth, or partly in writing and partly by word of mouth or may be implied from the conduct of the parties.
