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The Disposition of a Right of Occupancy in Tanzania The Effect of Refusal of Commissioners Approval

This brief note will discuss the correct meaning of the phrases shall be inoperative and shall be ineffectual as used in the Land Act, No. 4 of 1999. When so doing, the note will make reference to landmark case(s) in this area and try to assess their correctness in terms of their decisions, and see how other writers commented and gave out their understanding thereto. This note is solely based on personal arguments with few references cited where desirable. Under the Land Act, No. 4 of 1999 (as revised in 2004), disposition of a right of occupancy is covered under part VI subpart III of the Act. For a disposition to be operative and/or effective, it has to comply with the pre-determined requirements set out in the Land Act and any other law currently being in force, covering the relevant subject matter. I will not go through all requirements for a valid and effective disposition. The great concern of this note will be the requirements set out under sections 37(5) and 61(1) of the Land Act. To be more specific, I will concentrate much on the implications associated with the phrases shall be inoperative and shall be ineffectual as used under sections 37(5) and 61(1) of the Land Act, respectively. I would consider these two phrases as denoting the same meaning only that they are expressed in different terminologies. To that end, whenever the word inoperative is used, it should also mean ineffectual While assessing the impacts of these terms, I will be focusing on what the Late Mr. Zebron Steven Gondwe once tried to challenge the decisions of decisive cases in this area, particularly the case of Abualy Alibhai Azizi v. Bhatia Brothers Ltd (1999), miscellaneous Civil Appeal No. 1 of 1999 (unreported). Section 37(5) of the Land Act makes it inoperative any disposition of a right of occupancy carried out without first obtaining the approval of the commissioner for lands. The same effect

is accorded to any transaction affecting land carried out in a way other than in accordance with the Land Act. (See sect. 61(1)). The great controversy which surrounds the minds of academicians and/or practitioners is the true construction of the phrase inoperative. Does that phrase mean void in totality or just inoperative as to the extent of such disposition? The abualy azizi case (cited above) settled this controversy. The court of appeal in that case held that the expression shall not be operative does not mean void or another meaning to the same effect. The court held that it means at least that the contract in question is valid . This is where Mr. Gondwe tried to challenge the decision at page 43 of his book (Manual for transfers of rights of occupancy, 2010), where after quoting the ruling above, he wrote, and I quote; this where the problem begins, how can something which is inoperative be, at the same time, valid? If I understood him well, what he meant is that the contract cannot be inoperative and at the same time be valid. Before going further, I even doubt if that is the correct view. To my knowledge, it is possible for the same contract to be inoperative and valid at a time. A contract is inoperative under the law if it cannot serve the purpose for which it was entered by the parties. The contract is valid if met all necessary requirements and the parties can enforce the same in the court of law. (See Abualy case, at p. 6) Coming back to our concern, with due respect to the late Hon. Zebron Steven Gondwe, I shall express my inability to subscribe to his attempt to challenge the decision in Abhually Azizi case. I think Mr. Gondwe could not identify which the court (and probably the Land Act) considers inoperative and what may at least be valid. What is being inoperative here is the actual transfer or disposition itself. It is that very act of transferring the title. This does not include the pre contracts entered between the parties prior to the stage of seeking the commissioners approval.

I would opine that, there is no controversy as far as the decision in that case and the provisions of the Land Act are concerned. To my knowledge and understanding, what is considered inoperative is the disposition per se, and not the contract which the parti es entered prior to reaching the stage demanding commissioners approval. If you carefully go through sections 37(5) and 61(1) of the Land Act, you may find that what the drafters of the Act intended to consider as inoperative is not the contract of disposition, but the actual disposition itself, and it is inoperative only to the extent of such transfer (inoperative only as to change of title) as opposed to affecting the rights and obligations which the parties have agreed before. In other words, refusal of the commissioners approval cannot render the pre-contract between the parties void, let alone being inoperative. In more clear terms, if the intended disposition does not get co mmissioners approval, the interest in land which the parties intended to transfer cannot be transferred as per the law. That is the correct meaning of the disposition being inoperative. You will agree with me that every disposition affecting interest in land is precede by personal contracts into which the parties enter to agree on what will be the covenants binding each of them. These contracts are important because they contain matters which the Act empowers the parties to agree upon. It is the Law of Contract Act (Cap 345 R.E 2002) which sets out standards through which such contracts may be declared void or voidable. It should also be known that, the Law of Contract Act is the main law governing contract matters in the country. Therefore, any law attempting to address issues of contract shall confirm to what the Law of Contract Act provides. Let us consider section 2(2) of the Contract Act. Such section states; .where any written law in Tanzania on the date on which this Act comes into operation provides that an agreement (howsoever described), of the kind specified therein, shall not be enforceable by action unless or until certain requirements therein specified are complied , or certain consents are obtained, no such agreement shall be void by reason only that it is not

enforceable by action under the provision of that law for want of compliance with any such requirement or of the obtaining of any such consent.. The section above is self explanatory. It is my considered opinion that the drafters of section 37(5) and 61(1) of the Land Act were aware of the existence of the provisions of section 2(2) of the Contract Act. Therefore, they could not draft something which conflicts that law. That can reasonably not be the intention of legislature. Therefore, any attempt to rule that the expression inoperative means void would be contrary to the express provision in section 3(2) of the contract Act. It would even mean going against the true intention of drafters of the Land Act. Apart from that, holding that the phrase inoperative means void would mean to jeopardize the rights of parties to the contract preceding the actual disposition. The basis of this argument is that; when parties intends to transact the sale of property, say piece of land, among other stages, there is a stage where they are required to draft a sale agreement/contract. Some of these contracts demand that some advance payments be made. So one of the parties will take advantage of them. Therefore, if you rule that their contract if void just because commissioners approval was not granted means that the party (normally the buyer) who paid under the contract will not be able to recover the money he paid because you cannot claim repayment and/or compensation out what does not exist. I do understand the existence of section 65 of the contract Act but that section is not free from exceptions. Still, holding contrary to what was held in abualy azizi case would result into several questions likely to be left to be left unanswered.

Fikiri Liganga LLB (Hons) Tumaini University Makumira (TUMA) The Law School of Tanzania, 13th Cohort 2013. 0714 359 175 0683 167 579