On the 11th May 2020, the Court of Appeal issued a judgment in the case of Hadija Issa Arerary v. Tanzania Postal Bank. The Court of Appeal considered what amounts to reasonable steps taken by lenders to verify spousal consent in mortgages. They were of the view that the mortgagee was correct to disburse the loan believing that there was no third-party interest on the mortgaged property. In this update we will explore the judgment and its impact on the banking and finance sector.

"The Mortgagee argued that a caveat must be filed to protect the interests of a third party over the mortgaged property"

Background of the case

Tanzania Postal Bank (the Mortgagee) advanced a loan to Mr. Mwanuke (the Borrower) secured by a third-party mortgage on the title deed of Mr. Pangani (the Mortgagor). The Mortgagor swore an affidavit to the effect that he was not married and was the sole owner of the mortgaged property. The Borrower defaulted on the loan; consequently the Mortgagee exercised its enforcement rights under the law to sell the mortgaged property in order to recover the outstanding amount.

Mrs. Hadija Issa Arerary (the Appellant) challenged the sale of the mortgaged property at the District Land and Housing Tribunal (the DLHT) alleging, among other things, that she is the legal wife of the Mortgagor and her consent was not sought and obtained before creating a mortgage on their matrimonial property as is required by law.

DLHT found in favour of the Appellant. The Mortgagee being aggrieved by DLHT findings successfully appealed to the High Court of Tanzania (the High Court). In its decision, the High Court held that the Appellant failed to establish that she was the spouse of the Mortgagor on account of the fact that the mortgaged property was registered in the sole name of the Mortgagor who had also sworn an affidavit that, at the time of creating the mortgage, he was not married and was the sole owner of the mortgaged property. The Appellant preferred a further appeal to the Court of Appeal.


The Appellant argued that her consent was necessary prior to creating the mortgage as per the requirement under section 59 of the Law of Marriage Act, Cap 29 R.E. 2002 which states as follows:

Where any estate or interest in the matrimonial home is owned by the husband or the wife, he or she shall not, while the marriage subsists and without the consent of the other spouse, alienate it by way of sale, gift, lease, mortgage or otherwise, and the other spouse shall be deemed to have an interest therein capable of being protected by caveat, caution or otherwise under any law for the time being in force relating to the registration of title to land or of deeds.

She further argued that the first appellate court erred when stating that the interest in the mortgaged property could only be protected by a caveat, which in her view was incorrect because the Appellant cannot be deprived of her interest in the mortgaged property merely because there was no caveat filed.

The Appellant also challenged the affidavit sworn by the Mortgagor for being defective and that it could not have been relied upon in court. She further argued that the Mortgagee ought to have taken reasonable steps to inquire on the marital status of the Mortgagor and that simply inquiring from the tenants of the mortgaged property does not amount to 'reasonable steps' under the law.

The Mortgagee argued that a caveat must be filed to protect the interests of a third party over the mortgaged property. The Mortgagee also argued that the alleged defectiveness of the affidavit was only minor and insignificant and that the Mortgagee had taken sufficient reasonable steps to enquire on the marital status of the Mortgagor.


The crucial issue is whether the mortgage of the suit property was proper in law. The Court of Appeal held that filing a caveat to protect interests of a matrimonial home is now not a requirement owing to the amendment made to section 114 of the Land Act which was effected through section 8(2) and (3) of the Mortgage Financing (Special Provisions) Act No.17 of 2008 (the Mortgage Financing Act). Section 8(2) and (3) of the Mortgage Financing Act has shouldered the responsibility of disclosing whether or not a mortgagor has a spouse to a mortgagor, with the mortgagee having to take 'reasonable steps' to verify such information.

The Court of Appeal further held that the Mortgagor is required to swear an affidavit with regards to his marital status and what was crucial was the content of the affidavit. Since the Mortgagor did not denounce the contents of his affidavit, the Court of Appeal agreed with the High Court's finding that the admissibility of the affidavit was irrelevant.

The Court of Appeal stated that the Appellant is barred by the principle of estoppel articulated under section 123 of the Evidence Act [Cap 6 R.E. 2002], and, as such, the Appellant cannot challenge the affidavit as she was not the one who swore it.

Finally, the Court of Appeal dismissed the appeal, holding that the Mortgagee was correct to disburse the loan believing that there was no third party interest on the mortgaged property hence the mortgage was valid. The filing of an application by the Appellant before the DLHT was therefore a calculated move to deprive the Mortgagee of what it was supposed to recover.

What we can learn from this Court of Appeal case

  • A mortgagor has a legal obligation to disclose details of his/her spouse and to seek spousal consent before creating a mortgage over matrimonial property.
  • Lenders should ensure that they obtain affidavits and take reasonable steps to verify the matrimonial status of mortgagors.
  • Spouses who do not hold a joint registration on the title deeds of their matrimonial properties should undertake to either obtain joint registration or to file a caveat over the property in order to protect themselves from the unfortunate event where their spouse takes a page from Mr. Pangani's book and fails to disclose their matrimonial status. While a caveat is no longer a necessary requirement under the law, it forms an additional layer of protection for the aggrieved spouse. This is because upon conducting a search at the lands registry a caveat will show up in the relevant search report alerting banks/lenders that the property is a matrimonial home.

We hope this information has been useful. Should you require further information, please do not hesitate to contact us.

Originally published 9 June 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.