Court name
High Court of Tanzania

Sykes Insurance Consultants Ltd vs National Bank of Commerce () [1988] TZHC 37 (28 October 1988);

Law report citations
1988 TLR 215 (TZHC)
Media neutral citation
[1988] TZHC 37
Msumi, J.

Msumi, J:. This appeal is against the decision of the Resident Magistrate Court, Dar es Salaam. The subject matter  H is a house belonging to the respondents. Appellants have been in occupation of the suit premises from October 1974. Before then the said premises were in the occupation of one M/s Colin Hood Insurance (T) Limited (henceforth referred as the former tenants). Before the appellants occupied the premises the former tenants wrote  I the

  A respondents requesting them to let the appellants occupy the premise in order to enable them (the appellants), within a period up to the end of September 1975), execute work left pending by the former tenants. The operation of the business of the former tenants in Tanzania ceased after the National Insurance Corporation of Tanzania   B terminated their servicing agency. As far as material this is what the letter said:
   As you are aware the National Insurance Corporation of Tanzania have terminated the servicing Agency of M/s Colin Hood Insurance (T) Limited but they have requested that we carry on servicing business put through before the 1st of October,   C 1974 up to the end of 1975.
   In order that we carry out our commitments we have made arrangements with a newly formed company to take over all   D forthcoming renewals and new business that previously would have been put through Colin Hood Insurance (T) Limited and for them also to service the business up to the end of September, 1975. In order that the new company, Sykes Insurance   E Consultants Limited, can assist my company in servicing these clients and at the same time assist in the winding up of the company it will be necessary for them to occupy part of our office accommodation.
  F    We would therefore be grateful to have your confirmation that you have no objection to M/s Sykes Insurance Consultants Limited occupying part of our offices in order to carry out this very necessary task where the winding up of Limited Liability Companies are concerned.
  G This letter which was tendered as Exh. D1 was accordingly acknowledged receipt and replied by the defendants in a letter dated 5th November 1974 produced in court as Exh. B1. The material portion of the reply says:
  H    Kindly be advised that we have no objection to M/s Sykes Insurance Consultants to occupy part of your offices provided they follow and abide to our Housing rules.
  I Since then rents for the suit premises have been paid by the appellants in his name. All receipts for rents were issued in the

name of the appellants. However, by a letter dated 30th March 1982 (produced as Exh. D2) respondents gave the  A appellants three months notice to vacate the premises arguing that there is no tenancy agreement between them and the respondents and their occupation of the premises was purely on temporary arrangements. This is what they said:
   "Dear Sir,  B
   We have learnt that you were allowed by the Bank to occupy the said office premises formerly occupied by M/s Colin Hood Insurances (T) on temporary basis in order for you to finalise the work left by the termination of the latter's services as  D Insurance Agent by the National Insurance Corporation late 1974. No formal lease was however prepared for your execution as the whole arrangement was purely a temporary one and you were expected to hand over the premises back to the Bank E immediately you finalised M/s Colin Hood's pending assignments. It has been brought to our knowledge that you are still in possession of the said premises to date. We have now been instructed to give you THREE MONTHS NOTICE from the date hereof, which we hereby do, to vacate the said premises and hand over vacant possession to the Chief Manager Bank  F House Branch Dar es Salaam or Chief Manager Administrative Services Dept. in clean tenantable order. Kindly hand over the keys to him/them on or before the expiry of this notice period. Your liability to pay rent shall cease at the expiry of this notice  G and any arrears must be paid forthwith.
This notice was followed by another one which required the appellants to vacate the premises immediately. Consequently appellants filed a suit in the Resident Magistrate Court praying for:  H
   1.   Declaratory Order that they are the lawful tenants of the defendants in respect to room 1 - 9, 2nd Floor Bank House Building, Dar es Salaam.
   2.   Permanent Order of injunction to restrain the defendants from harassing the Plaintiffs.  I

  A    3.   Payment of the rent into court at the defendants' cost in event of further refusal to accept the same.
   4.   Cost of this suit.
   5.   Such further and other reliefs as may be deemed just and proper by this Honourable Court.
  B In their written statement of defence, respondents strongly contested the allegation that appellants were legal tenants of the suit premises hence prayed for dismissal of the suit. Before the trial began the parties agreed that there   C was only one issue in dispute, namely, whether the plaintiffs/appellants are legal tenants of the suit premises. The learned trial magistrate answered this issue in the affirmative. This is what he said:
   ..... it is clear in my mind that the plaintiffs were accepted by the defendants as tenants and their relationship can only be   D described fairly as a tenant-landlord relationship. In that event therefore I rule that the plaintiffs were lawful tenants of the defendants.
  E However, the learned trial magistrate was of the considered view that the alleged tenant-landlord relationship was of a temporary nature intended to last after a completion of a specific purpose which was to enable the appellants to assist in winding up the activities of the former tenants. The learned trial magistrate farther held that the said   F temporary tenancy had been effectively terminated by the alleged notice which required the appellants to vacate the suit premises. This appeal is against the said decision of the trial court.
The learned counsel for the appellants submitted five grounds in support of the appeal. In the first ground he argued   G that the learned trial magistrate misdirected himself at law by holding that appellants were not protected by the Rent Restriction Act. The remaining grounds are basically supplementary to the first ground. The determination of this appeal thus depends on the merits or demerits of the said first ground of appeal. In order for the provisions of   H the Rent Restriction Act to be applicable two factors must be established. First there must exist a landlord- tenant relationship between the parties. An occupation of premises under some arrangements other than that of a landlord and a tenant does not fall under the provisions of the Act. Hence it has been held by this court in K.Y. Juma v Juma   I Mwango[1973] LRT n.9 when El-Kindly J. observed, inter alia:

   .... The second ground of appeal is more relevant in this appeal as it is the one that controls the first ground of appeal. Do the  A provisions, or any of them of the Act apply in this case? As I have said the Act is only applicable where there is a relationship of landlord and tenant .....
As noted earlier, the learned trial magistrate made a specific finding that there is in existence a landlord - tenant  B relationship between the respondents and appellants. With respect, I fully agree with him. Respondents' persistent denial that appellants are not legal tenants of the suit premises is unsupported by both facts and law. After they had  C let the appellants occupy the suit premises for the period up to the end of September 1974 as requested by the former tenants, respondents, through their conducts, accepted them as their tenants. For example for about nine years respondents have been accepting rents from the appellants and issuing receipts in their name. Furthermore when communicating with appellants, they have been addressing them as the tenants of the suit premises. For  D example on 3rd August 1982 respondents wrote to the appellants notifying them of their intention to raise the rent after the suit premises had been inspected by Government valuers. The heading of that notice reads "NOTICE TO INCREASE RENT PROPERTY LEASED TO TENANTS". And after the new rent had been fixed by the Rent  E Tribunal, respondents notified the appellants and demanded from them a total of shs. 6,770/= being difference between the new and old rent for the period from 1st March 1983 to 31st December 1983. Appellants paid this  F amount and respondents acknowledged receipt of the same. Then there is a letter dated 5th March 1981 written by the appellants to respondents asking for two keys for the main entrance to the suit premises. That letter which was produced by the appellants as Exh. D3, as far as material, reads:  G
   We are your tenants occupying Room Numbers 1 to 9 on second Floor of Bank House, Independence Avenue, and since most of our staff often work late in the evening we should be most grateful if you would let us have two keys for the main  H entrance as soon as possible (emphasis supplied).
Respondents did not cntrovert the truth of the above underlined sentence. That would have been a proper opportunity for the respondents to restate their relationship with the appellants as far as the suit premises are  I concerned. But on the contrary, respondents

  A gave the appellants the required two keys after they were paid shs. 250/= for the same. All in all, except for the controversial notice for vacating, the conducts of the respondents have been throughout consistent with the existence of tenancy relationship between the parties.
  B The second factor which must exist in order for the provisions of the Act to apply is the situation of the suit premises within the area to which the Act applies; which is technically known as rent restriction area. The whole area within Dar es Salaam city is a rent restriction area as per section 3(1) of the Act. Since it is clear that the parties are   C in the relationship of landlord and tenant and the suit premises are within the rent restriction area, the answer as to whether the provisions of the Act are applicable in this case must be in the affirmative form. This means that as tenants, appellants are fully protected by the provisions of the Act. One of such protections is that they can only be   D evicted from the suit premises for statutory misconducts as prescribed under the Act or when the premises are required by the respondents for their own use and appellants have been offered alternative accommodation. It would appear the learned trial resident magistrate was aware of these rights hence explains his specific finding that   E appellants cannot benefit from the provisions notwithstanding the fact that they are tenants of the suit premises. In coming to this finding the learned trial magistrate argued that the tenancy relationship existed between the parties at any time. With respect this argument is novel both factually and legally. As quite rightly submitted by the learned   F counsel for the appellants that there is nothing like temporary or permanent tenancy known in law. Tenancies are either for specific periods, which may be short or long, or for some undeterminable period with right of termination explicitly or impliedly reserved by each party. As for this case, the first understanding was that the tenancy was to   G last up to the end of September 1975 when the pending insurance servicing work and the process of winding up of the business of the former tenants would have been completed. But as amply demonstrated earlier, after the end of September 1975 respondents went on to accept the appellants as their tenants. Since there has been no expressed   H tenancy agreement, the parties are deemed to be in a statutory tenancy as prescribed under 32(1) of the Act (equal to section 26(1) of the repealed Act) which says:
  I    .... tenant who, under the provisions of this Act, retains possession of any premises shall so long as he retains

   possession, observe and be entitled to the benefit of all the terms and conditions of the original contract of tenancy, so far as  A the same are consistent with the provisions of this Act....
In this case there has been no dispute from the respondents on the legality of appellants' initial occupation of the suit premises. And there has been no suggestion, and I can find no basis for such suggestion, that the occupation of the  B suit premises by the appellants was done contrary to the provisions of this Act. Hence consequent to his retaining possession of the suit premises after the end of September 1975 appellants became statutory tenants under section 32(1) of the Act and accordingly entitled to the protection of the relevant provisions of the Act. And farthermore  C appellants are entitled to the benefits and rights enjoyed by the former tenants under the original tenancy agreement.
In their defence respondents are claiming that up to the time when they issued the appellants with notice to vacate  D the suit premises, they were of the understanding that the former tenants were still in occupation of the premises. With respect, I don't think that respondents are serious on this claim. They have been corresponding with the  E appellants in respect of the suit premises all this time. And as pointed out earlier, appellants, in the letter dated 5th March 1981 addressed to the respondents have lamely argued that appellants have been corresponding with the Bank House Branch as opposed to the Head Office of the respondents' corporation. Again this contention is not  F worthy of serious consideration. To my understanding the National Bank of Commerce means and includes all its various branches and institutions. None of these branches enjoys separate legal entity from that of the National Bank of Commerce as a corporation. This means that the acts of these branches are the acts of the corporation as a body. But even if one was to be charitable enough as to accept the respondents' argument, respondents would still be held  G bound by the various communications between the so called Bank House Branch and the appellants on the theory of principal/agent relationship. By his conducts, respondents have created reasonable impression to the appellants  H that for the purposes of matters pertaining to the tenancy of the suit premises, the Bank House Branch office was their agents. For example, for the whole of this period the said branch office has been collecting rents of the suit premises with acknowledgement of the respondents. And after the Head Office had written the appellants notifying  I them of their intention to raise rent, there followed letters

  A by the said branch office informing the appellants of the arrangements for valuation of the suit premises, the subsequent new rent and the total arrears of rent being the difference between the old and new rent.
  B Lastly, with respect, I appreciate the efforts made by the learned trial magistrate to support his decision to grant respondents vacant possession of the suit premises by citing a couple of court decisions. But with even greater respect, those decisions have no relevancy to the facts of this case. For example in Abdull Azizi v Hadija Salum [1980] TLR  22 my learned brother Mwakasendo, J., as he then was, was considering the right of a landlord to   C repossess his premises for his personal use and his obligation to offer the tenant with alternative accommoation. In the present case there had been no specific prayer in the pleadings that respondents needed the suit premises for his own use. The sole ground advanced by them for vacant possession is their claim that appellants are not their tenants.   D Hence the learned trial magistrate's finding that defendants have not "attempted to diligently look for an alternative accommodation" is, to be mild, quite extravagant.
In conclusion this appeal succeeds with costs. As per prayers, appellants are declared to be the lawful tenants in the   E suit premises and respondents are hereby permanently restrained from harassing them.
Appeal allowed.