Q&A – 13 August 2012
Gifts to beautiful girl
I met this beautiful girl and we started going out for some time. Having proposed to her and upon her agreeing to marriage, I gave her several gifts including one of my cars to ensure she is comfortable. I was shocked to find out recently that she has another man, who pretended to be the driver of the car, whom she has a serious relationship with and who has already paid a bride price. She is now refusing to give me back the gifts including the car. What should I do?
JR, Mwanza
Gifts given in contemplation of marriage are recoverable under the law if the intended marriage never happens. Section 71 of the Law of Marriage Act allows a suit to be brought for the return of any gift made in contemplation of a marriage which has not been contracted, where the Court is satisfied that it was made with the intention on the part of the giver that it should be conditional on the marriage being contracted, but not otherwise. Your lawyers can guide you further.
Loan before security perfection
In good faith our bank gave a loan to a customer without completing the security perfection procedures especially the mortgage which remains unregistered. Little did we know that the borrower’s intention was to disappear with this large sum of money. We now realize that the title deed he gave us to register is an old title that was revoked but looks very original. What should we do? The property still exists but belongs to someone else.
TY, Dar
It is a banking 101 principle that you should not give out a loan without perfection. Considering the facts, you are an unsecured creditor and apart from instituting a criminal complaint, will have to sue the individual for recovery and attach his or her personal assets, if any.
It is likely the person also used a fake name and you may never find this person. Our experience reveals that such loans are always given in collusion with your officers. You may want to investigate further to conduct an internal investigation. Overall your chances of recovery look very bleak unless there are other securities you can rely upon.
At the least, we would have expected you to have taken the original title to the registrar of titles at the Ministry of Lands for verification before disbursing. It seems you did not even do that.
Will stolen
My sister in law has stolen my husbands Will from our cupboard. I am quite certain of that as there is a property she is eyeing that belonged to my husband that is supposed to pass to me. What should I do?
YE, Mbeya
The Penal Code specifically addresses this in that If the thing stolen is a testamentary instrument, whether the testator is living or dead, the offender is liable to imprisonment for ten years. We suggest you report this to the police who can launch an investigation and based on the result, the police may wish to prosecute your sister in law. She can end up in prison for ten years.
Commercial Court fees too high
We have a matter that we intend to file at the Commercial Court only to find out that the fees are 3% of the subject matter. Our action is based on an amount in excess of Tsh 20 billion meaning that our Court fees assessment will be Tsh 600 million. Is there no ways to get a reduction on the Court fees? How can a Court charge such high fees for a matter?
GH, Dar
The High Court Commercial Division is one of the most admired Court’s in East Africa that is manned by extremely competent Judges. The whole motto of this Court is to dispose of matters with the greatest speed possible. With speed come costs.
Your concern of Court fees has been recently addressed in the Commercial Court fees rules 2012 which came into force a few months ago.
The new fees structure is as follows: 2% of the value of the subject matter provided that the total amount of fee payable shall not exceed TShs.1O million. These new rules revoke the old rules and hence the maximum amount of Court fees anyone would pay at the Commercial Court is now Tsh 10 million.
The same rules provide that where a suit is successfully mediated or settled out of Court within six months from the date of filing, a Judge or a Registrar may make an order of refund of one quarter of the filing fees to a party seeking refund.
And just to clarify, the old fees were not a straight 3% but rather 3% on the first Tsh 200 million and 1% thereafter. Hence on your Tsh 20 billion matter, the fees would have been about Tsh 204 million and not Tsh 600 million.
VAT to foreign company
I have been consulting for a foreign company on matters related to a certain project in Arusha which I further subcontracted part of to a Kenyan company. My question is on the tax implications of the transaction. First do I have to raise an invoice and add VAT to it? If so, how does the foreign company claim the VAT back? Secondly, does my client have to withhold taxes on the outsourced work to Kenya?
PL, Dar
Value added tax does apply to your invoices and your client must pay the invoices with VAT added onto the fee. And since your client is not registered here, it will not be able to claim back the VAT from TRA.
On the second question, no withholding tax applies to your client since it is you who has subcontracted the work not your client. Hence withholding tax of 15% on the gross value of the sub contract will apply to all remittances that you make to the Kenyan company.