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 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 renovations, additions and improvements made to the station.
On whether the respondent refused to accept the appellantfs 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 gmain supplierh 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 doubted whether Exh. D1 referred to the fuel tanks and pumps in issue because when
it was written the station was in full operation, unlike Exh. D1 which suggests at the material time the tanks and pumps were lying
idle.
Furthermore, while it is processed by computer, the word gKaratuh 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 judgefs finding that it
did not comply with the requirement of Order VIII Rule 6 (1) of the Civil Procedure Code, 1966.
Responding to the appellantfs 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.
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 which it was argued
and submitted by counsel. We therefore start 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 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 by 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 respondentfs learned
counselfs submission that Exh. D1 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 judgefs
finding of fact that the respondent provided the equipments and did the above works for the operation of the station.
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 appellantfs complaint is that, the respondent
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 judgefs 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 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 appellantfs 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 judgefs finding on this.
In ground No. 10 the appellantfs 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
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 plaintifffs 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
both parties fill the same character a they fill in the plaintifffs 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.
Moghafs 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:-
gA 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.h
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.
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 and for failure
to annex annextures 1 and 2 to Exh. P1. 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 renovation. Had this not been the case the station wouldnft operate and
the appellant wouldnft 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.
DATED at DAR ES SALAAM this 27th day of July, 2006.
.RTF of original document