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5
refused to supply the required fuel and oil products unless and until paid in advance. Under the circumstances the learned counsel
urged us to hold the respondent responsible for the breach of the contract. \his last part of his submission covered also the 5th and 6th grounds of appeal.
In elaborating on ground No. 7 the learned counsel asserted that, the term "main supplier'' in the contract did not mean the
respondent was the sole supplier. In that respect when the respondent refused to supply as demonstrated earlier the appellant sourced
supply from other sources, and that this should not be taken as a breach of the contract, submitted the learned counsel. Submitting
on grounds Nos. 8 and 9 together Mr. Lukwaro insisted that the fuel tanks and pumps belonged either to BP or to the appellant. The
learned counsel referred the Court to Exh. Dl which is a letter dated 5.2.2002 from BP to the appellant notifying the appellant of
their intention to repossess the said tanks and pumps. The learned counsel contended that, since the said tanks and pumps did not
belong to the respondent, there was no basis upon which the
6
respondent should be paid by the appellant Shs. 32,250,000/= being use value of the same.
Submitting on ground No. 10 Mr. Lukwaro observed that, the ^respondent was indebted to the appellant to a tune of Shs. 4,339,225/17
for various business transactions, and that PW2 Michael Mafikiri Maro had admitted that the appellant had some claims against the
respondent. The learned counsel urged us to hold that that amount should be treated as a set off. In arguing ground No. 11 the learned
counsel insisted that it was the respondent who breached the contract for the reasons stated earlier.
Responding to these submissions Mr. Mkoba, learned counsel for the respondent, contended that, the fuel tanks in issue belonged to
the respondent. He conceded that formerly they belonged to BP, but later there was a mutual understanding between BP and the respondent
whereby the said tanks were exchanged with those of the respondent, and so became the property of the respondent. As for the pumps
the. learned counsel asserted that, BP removed the old ones belonging to BP and the respondent installed three new ones, and that
this was supported by the evidence of PW1 Ndekiro Arsel
7
Maimu, and to some extent by DW2 Anamenyisa Johnson Macha. As for renovations, additions and improvements, the learned counsel pointed
out that the evidence of PW2 speaks by itself on the Venovations, additions and improvements made to the station.
V
On whether the respondent refused to accept the appellant's cheques the learned counsel asserted that the only cheque turned down
by the respondent was the one with less amount after the appellant had unilaterally deducted some amount on the pretext of exercising
the right of set off. The learned counsel denied the respondent to have breached the one month credit facility term. The learned
counsel observed that that allegation was not even put forward by the appellant when corresponding with the respondent on why the
appellant no longer ordered supply from the respondent. The learned counsel conceded that the term "main supplier" did
not mean the respondent was the sole supplier. But he was quick to point out that from July, 2003 the appellant never ordered any
supply from the respondent and resorted to other suppliers although the respondent was ready and willing to supply.
Responding to ground No. 8 the learned counsel insisted that, the four fuel tanks and three pumps belonged to the respondent. He
8
doubted whether Exh. Dl referred to the fuel tanks and pumps in issue because when it was written the station was in full operation,
unlike Exh. Dl which suggests at the material time the tanks and hyperlink were lying idle.
Furthermore, while it is processed by computer, the word "Karatu" is hand written, observed the learned counsel. Responding
to the claim of Shs. 32,250,000/= as use value of the four fuel tanks and three pumps and the electric generator for the remaining
period of two years, the learned counsel pointed out that, the evidence of PW2 is very clear on this. As for the alleged set off
the learned counsel supported the learned judge's finding that it did not comply with the requirement of Order VIII Rule 6 (1) of
the Civil Procedure Code, 1966.
Responding to the appellant's submission on ground No. 11, the learned counsel insisted that it was the appellant who breached the
contract by failing to order supply for no good cause and for terminating the contract without the requisite three (3) months notice.
9
We have carefully considered the rival submissions by learned
counsel for both parties. For a better sequence of events, we think,
it is appropriate if we deal with the appeal following the order in
V.
with grounds Nos. 1, 2, 3 and 4. Essentially, they refer to whether the respondent provided the equipments required to run the petrol
station at Karatu as per the agreement, and whether the respondent made the renovation and the installation as per the agreement.
It is common ground that from August, 2000 till around June, 2003 the petrol station in issue was operating, and that the main supplier
of fuel and related* products was the respondent. This leaves no doubt in our minds that there were equipments necessary for the
operation of the station. The only issue on this is whether it was the respondent who was the owner of the equipments. While the
respondent is maintaining that they (i.e. four fuel tanks, three pumps and an electric generator) were theirs, the appellant on the
other hand is contending that the four fuel tanks and three pumps were the property of BP.
The appellant does not say who was the owner of the electric generator but impliedly denies its existence. Going by the evidence
10
of PW2 it is evident that the four fuel tanks formerly were the property of BP but later they were taken over by the respondent in
exchange with their tanks. As for the three pumps, there is evidence ^y the same witness that they were installed by the respondent
after BP had removed theirs. This was supported to some extent by DW2. There is also evidence by the same witness PW2 that the respondent
installed an electric generator for the operation of the station. As for renovation, additions and improvements, there is evidence
by PW2 that the respondent did the following works:-
-" Back filling and leveling
- Connection of pipes and calibration.
The state of affairs being as portrayed above, we accept the respondent's learned counsel's submission that Exh. Dl probably referred
to other tanks and pumps, especially bearing in mind the anomalies which the learned counsel pointed out. For these reasons we are
respectfully in agreement with the learned trial judge's finding of fact that the respondent provided the equipments and did the
above works for the operation of the station.
11
There is a complaint by the appellant on the absence of Annextures 1 and 2. We will deal with this later.
Coming to grounds Nos. 5 and 6 the appellant's complaint is that, the hyperlink refused to accept cheques from the appellant and insisted on prior payment thereby breaching a term of the contract which provided
for a one month credit facility. But the totality of the evidence points to only one cheque which was turned down which had less
amount on the pretext that the appellant had set off some amount which it was claiming against the respondent for some other business
transactions. That refusal was justified as it will become apparent later. There is nothing in the record suggesting that the appellant
reduced the one month credit facility. There is nothing to fault the learned trial judge's finding on this.
There is no dispute that from around July/August, 2003 the appellant ceased to order supplies of fuel and related products from the
respondent and resorted to other suppliers, precisely CALTEX. In its letter Exh. P2 the appellant did not say why it ceased to order
the same from the respondent and resorted to other suppliers. Instead
12
the appellant threw the ball to its advisor, a Mr. P.F. White who was by then out of the country.
The appellant never clarified even when Mr. White was back in the Country. That being the case, it is apparent that, although the
respondent was not the sole supplier but merely the main supplier, yet where the respondent was ready and willing to supply but the
appellant ceased to present its orders for no good ground, the appellant breached the terms of clauses 1 and 5. This answers the
appellant's complaint in ground No. 7.
Grounds Nos. 8 and 9 refer to ownership of the four fuel tanks and three pumps, and the justification or otherwise of their use value.
We have already found that the same belonged to the respondent. The use value of the same was clarified by PW2 in his evidence. We
have nothing to fault the learned trial judge's finding on this.
In ground No. 10 the appellant's complaint is that, the learned trial judge erred in law and in fact in finding that the appellant
had no claim against the respondent entitling the appellant to a right of
13
set off. Admittedly, the appellant had pleaded right of set off to the tune of Shs. 4,339,225/17 in paragraph 11 of the Amended Written
Statement of Defence. Even PW2 in his evidence admitted the respondent to be indebted to the appellant for some claims, although
he did not specify the amount. The issue here is not whether the respondent is indebted to the appellant or whether the appellant
has a right of set off. The issue here is whether the right of set off was properly pleaded.
The law on pleadings allows a defendant to raise a claim of set off in his written statement of defence. But there are conditions
which must be complied with as provided for under order VIII Rule 6 (1) of the Civil procedure Code, 1966. For ease of reference
we hereby reproduce the said provision:
Order VIII Rule 6 (1): Where in a suit for the recovery of money the defendant claims to set off against the plaintiff's demand any
ascertained sum of money legally recoverable by him from the plaintiff, not exceeding the pecuniary limits of the jurisdiction of
the court, and
14
both parties fill the same character
a they fill in the plaintiff's suit, the
defendant may, within period of
twenty-one days of being served
\
with the summons, present a
written statement containing the particulars of the debt sought to be set off.
Mogha's Law of Pleadings with Precedents - Fourteenth Edition -Eastern Law House page 322 is also very relevant on how a claim for
set off should be. It says:-
UA claim for set off must — give all the particulars of the set off, the amount claimed, the cause of action for the amount, the person to whom and by whom it
is due and the date of which it became due."
In the instant case the alleged set-off was not particularised in the manner envisaged by the above provision. In that respect we
fully agree with the learned trial judge in rejecting it for not being properly pleaded.
15
Lastly is ground No. 11 in which the appellant is blaming the respondent for the breach of the contract for refusing to accept cheques,
failure to supply fuel, reducing the one month credit facility end for failure to annex annextures 1 and 2 to Exh. PI. We have already
expressed our view on the alleged refusal to accept cheques, failure to supply fuel and reducing the one month credit facility. We
think it would be of no practical value to go all over them again. As for failure to annex the above annextures, it is common ground
that, indeed they were not annexed. Annexture 1 referred to a list of necessary equipments required to run and operate the station
which the respondent was required to supply and install at its own costs and expenses. Annexture 2 referred to renovations, additions
and improvements the respondent was required to make at its own expenses. We have already found as a fact that the four fuel tanks,
three pumps and the electric generator belonged to the respondent. We have also found as a fact that some renovations were made as
demonstrated earlier. It is also common ground that the station operated for a period of three years. That being the case we are
inclined to hold that the respondent supplied the necessary equipments for the operation of the station and made the necessary
16
renovation. Had this not been the case the station wouldn't operate and the appellant wouldn't have remained mum. He would definitely
have complained. There is nothing suggesting that the appellant took issues with the respondent on the matter. At any rate, it is
our considered view that failure to annex those annextures did not affect the supply of fuel and related products, and the respondent
cannot be held responsible for the breach of the contract for the failure. On the contrary, for the reasons stated, and for the undisputed
fact that the appellant terminated the contract without the requisite three months notice, we agree with the learned trial judge
that it was the appellant which breached the contract, and was rightly ordered to pay the respondent what the respondent would have
earned had the contract been performed to the end.
In the result, and for the reasons stated, we dismiss the appeal with costs.
17
th
DATED at DAR ES SALAAM this 27th day of July, 2006.
J.A. MROSO JUSTICE OF APPEAL
\
JA. MSOFFE JUSTICE OF APPEAL
S.N. KAJI JUSTICE OF APPEAL
I certify that this is a true copy of the original
( S.M. RUMANYIKA ) DEPUTY REGISTRAR
4 $*?*
URL: http://www.saflii.org/tz/cases/TZCA/2006/6.html