CIV

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA CIVIL APPLICATION NO. 364 OF 2025 FIRST ASSURANCE COMPANY LIMITED................................. APPLICANT VERSUS HERITAGE INSURANCE COMPANY TANZANIA LIMITED............................................................. RESPONDENT (Application for stay of execution of the Judgement and Decree of the Court of Appeal dated 5th April, 2023 in Civil Appeal No.165 of 2020, reversing the Judgement of the High Court, Commercial Division Commercial Case No. 145 of 2018^ (LILA J.A- MWANDAMBO J. A and FIKIRINI. J.A) Dated the 5th day of April 2023 in Civil Appeal No. 145 of 2018 RULING 28th February - 11th March, 2025 MANSOOR, J.A.: The application dated 18th February 2025, filed under the Certificate of Urgency, seeks for orders for stay of execution of the Judgement and Decree delivered on 5th April 2024 by the Court of Appeal, in Civil Appeal No. 165 of 2020, pending the hearing and determination of the review. This application is brought under Rule 4 (1), (2) (a), (b), and (c) of the Tanzania Court of Appeal Rules, G.N. 368 of 2009, as amended, and any other enabling provisions of the law. The applicant states that the respondent was awarded a decree of USD 533,530.50 as principal sum, and TZS 50,000,000 as general damages by the Court of Appeal in Civil Appeal No. 165 of 2020. Being dissatisfied by the said award, he had filed an application for Review No. 317/16 of 2023 and the respondent also was dissatisfied of the award, and has also filed an application for review No. 432/01 of 2023, both the applications are pending the hearing at the Court of Appeal. While the applications for review are pending for the determination by the Court of Appeal, the respondent herein has started the processes of execution of the decree, thus he instituted an application for execution No. 1248 of 2025 at the High Court, Commercial Division, Dar es Salaam. Following the institution of the application for execution, the High Court issued several garnishee orders nisi in which several bank accounts of the applicant in different banks were attached. The garnishee orders nisi was sent to NCBA Bank Tanzania Limited for attaching Account No. 103826100048 (USD), and No. 28810015599 (TZS). The Court also issued a garnishee order nisi for attaching Account No. 28810015599 at NMB Bank PLC, and Account No. 0150210162700 kept at CRDB Bank PLC. The applicant was informed by the banks about the garnishee orders nisi on 13 February 2025 via emails, and on 18th February 2025, the applicant lodged this present application praying for lifting garnishee order /7/s/and stay of execution. The applicant further averred that unless stay of execution is granted, the respondent would embark on execution process, which would be highly prejudicial to him and that would render the review filed to be nugatory. The applicant also avers that if the accounts will continue to be attached, his business will suffer as his daily business is to receive premiums from the insured persons, and reimburse them for the covered risks. He avers that without the operation of his bank accounts, the insurance business will not strive. Finally, he also averred that he is ready and willing to abide by any order of this court as shall be issued with regard to security. The application was opposed by the respondent who filed the affidavit in reply which was sworn in by Counsel Audax Kahendaguza Vedasto saying that the Court never issued a garnishee order nisi for attaching Account No. 1003826100038, which is the USD Account kept at NCBA Bank Limited and Account No. 28810015599 kept at NMB Bank PLC. He also admitted that the applicant has filed an Application for Review No. 317 of 2023 but he disputes that the application has any chances of success. Counsel Audax Vedastus disputes the date in which the applicant became aware of the execution proceedings. He specifically attacks the contents of paragraphs 9 and 10 of the applicant's affidavit, and in particular Exhibit El, which is the emails from the officers of the Bank to the officers of the applicant. He states that from the contents of the email, it appears that the applicant was aware of the ongoing execution even before the date he received the email from his bankers, as that email shows that the applicant was requesting for documents relating to execution. He argues that the applicant has concealed the facts as to when he became aware of the execution, and it should be taken that he was aware of the execution since the date the application for execution was filed in court. On this he refers the court to the case of COCODACOR General Company Limited vs Unyiha Associates Co. Limited & 2 others, Civil Application No. 343/17 of 2022, in which it was stated that the applicant in an application for execution has a duty to show the date he becomes aware of the application for execution, failure to disclose that material information in the affidavit, the application will be regarded as filed beyond the time prescribed, and it should be struck out. He again refers to the case of Robby Traders Ltd vs CRDB Bank PLC & Another, in Civil Appeal No. 70 of 2012, [ 2017] TZCA 236 (22 March, 2017) where the court found that the plaintiff was not clear as to when the cause of action arose, and the case was ruled against the plaintiff as it was ruled that the matter was filed out of time. He urged the court to take it that the applicant became aware of the execution proceedings since 17/1/2025, the date the application for execution was filed in the High Court, Commercial Division, Dar es Salaam, as shown in annexure A of the affidavit of the applicant. The counsel for the respondent also objected on the issue of substantial loss. The Counsel states that it is true that the applicant has mentioned in paragraphs 7 and 8 of the affidavit that he will suffer substantial loss if the accounts will continue to be attached. He says, the applicant did not give details on how the garnishee orders nisi has stopped him from operating the accounts as what is attached is the decretal amount only, and the rest of the money can be used. The counsel argues that the applicant should have attached the bank statements in his affidavit, which would have shown that the applicant has no more money in the accounts apart from the money that was attached. The counsel refers to the case of Aidan George Nyongo vs Magese Machenja and 3 Others, Civil Application No. 237/17 of 2016, in which at page 8, the Court said, that, the applicant has a duty to demonstrate how he will suffer substantial loss if the stay of execution order will not be issued, and failure to establish substantial loss to be suffered, it means that the applicant has failed to meet the conditions stipulated in Order 11 (5) (a) of the Court of Appeal Rules. The counsel says, the averments in paragraph 11 of the affidavit contradicts the contents of paragraph 8 as the applicant's affidavit in which the applicant says that, it is a reputable company with financial muscles to meet its liabilities and to satisfy the decree, this means that even if he is ordered to pay the decretal sum now, the applicant will continue to strive. On this he refers to the case of Rosemary M Hamilton vs George Oreku and Janeth Isaack, Civil Application No. 15/01 of 2023, where it was emphasised that the decree holder has the right to enjoy the fruits of the decree at the earliest possible opportunity, unconditionally. The counsel for the respondent insisted that his client has the right to benefit from the decree at the earliest opportunity, even though there are applications for review pending before the Court. I have heard the rival submissions made by the counsels for the parties herein, also, I have considered the affidavits filed for and against the application. At the outset, I agree with the submissions of both counsels that although the application was preferred under Rule 4 of the Court Rules, the conditions for granting the stay of execution order as envisaged in Rule 11 (5), (a) and (b), must be met. This was also stated in the case of Mekefason Mandali and 8 Others vs the Registered 6 Trustees of the Archdiocese of Dar es Salaam, Civil Application No. 491/17 of 2019, at page 12, in which the court stated that although the conditions for provision of security for the due performance of the decree, and demonstration of substantial loss are provided under Rule 11 (5) of the Rules, the conditions will apply even for an application for stay of execution made under Rules 4 of the Rules. Now, the issue to be determined is whether the applicant was able to demonstrate that he will suffer substantial loss if the stay order will not be issued. In determining this issue, I read the contents of paragraph 8 (i) to (v) of the affidavit in support of the motion. First, it is stated in that paragraph that the applicant was never served with the application for execution, and the orders to attach the applicant's accounts in different banks were issued without affording the applicant the right to be heard. That the respondent did not attach only one account, he attached two accounts at the NCBA Bank, one account at NMB Bank and one account at CRDB Bank, and garnishee order nisi were issued to attach the same amount in every account, thus the amount garnished is four times the amount of money in the decree. If the garnishee order nisi will not be lifted, it will amount to excessive execution of the decree. The applicant has given the nature of his business that he is doing the insurance business. The applicant covers different risks and the money for covering 7 the risks is kept in the bank accounts which have been garnished. There is likelihood that he will fail to pay the covered amounts to the insured and may lead to more lawsuits, and this is a demonstration of the irreparable loss as it will lead to sterilization of the applicant's business. From the averments in paragraph 8, and understanding the nature of business of the applicant, as well as the fact that four accounts have been garnished to cover the same amount of money is enough demonstration to substantiate that if the garnishee order nisi is not lifted, the applicant business will suffer, and thus contrary to the submissions of the respondent's counsel, the applicant was able to demonstrate the kind of loss he will suffer if the order to attach the accounts will be left to proceed. I have also considered the arguments of the counsel for the respondent and I agree that the decree holder is entitled to have the decree executed at the earliest and he is entitled to the fruits of the decree, thus he has the right to put the process of execution in motion, and this by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the accounts have been attached and money therein have been frozen or taken, as is the case here, does not in itself amount to substantial loss. This is so because execution is a lawful process. The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the review. This, has been successfully demonstrated by the applicant as explained herein above. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the review nugatory. As for the time taken for lodging the present application, I am satisfied that the application was lodged within reasonable time. The counsel for the respondent has admitted that he lodged the application for execution, and never served it to the applicant. He also admitted that he obtained garnishee orders nisi in the absence of the applicant, and had served them to the applicant's bank straight. It is also an undisputed fact that the applicant was never notified either by the court or by the respondent of the initiation and the proceedings that took place in the executing court. It is therefore true as averred by the applicant in paragraphs 9 and 10 of the affidavit in support of the motion that the applicant became aware of the existence of the execution proceedings when he was notified by the banks, and this is not before 13th February 2025, as stated in paragraph 10 of the applicant's affidavit. The counsel for the respondent who alleges that the applicant became aware of the execution even before 13th February 2025, needed to prove that allegations as the court cannot give a relief on assumptions. 9 It is cardinal principles in the Evidence Act that who alleges a fact to exists must prove that it exists or has existed. See African Banking Corporation T. Ltd vs T-Better Holdings Co. Ltd (Civil Appeal No. 207 of 2017) [2024] TZCA 165 (6 March 2024) and FB General Contractors and Another vs Bank of Baroda Tanzania Limited (Civil Appeal No. 202 of 2022) [2025] TZCA 61 (24 February 2025). Suffice it to say that as pleaded in paragraph 10 of the applicant's affidavit, which facts have not been disputed in the affidavit in reply, the applicant became aware of the existence of the execution proceedings on 13th February 2025, after being notified by the banks, and promptly on 18th February 2025, the applicant lodged this present application. Thus, the court is satisfied that the application for execution was lodged within the time prescribed in Rule 11 (4) of the Rules, as such within a reasonable time. As regards to deposit of security, the applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition, a party who seeks the right of appeal or review as in the present application, from a money decree, for an order of stay must satisfy this condition on security. The issue of deposit of security for due performance of decree must come from the applicant of his willingness and ability to settle the decree in the case he fails in the appeal or review. 10 The court then shall determine the type of security to be furnished. The applicant in the affidavit said that he is ready to provide the insurance bond from a reputable insurance company as security for due performance of the decree. It is trite law that where the applicant intends to exercise his undoubted right of appeal, revision or review, and in the event, that he was eventually to succeed, he should not be faced with a situation in which he would find himself unable to get his money back. Likewise, the respondent who has a decree in his favour should not, if the applicant were eventually to be unsuccessful in its intended appeal, revision or review, find it difficult or impossible to realize the decree. This is the cornerstone of the requirement for security. So long as the opposite party can be adequately protected, it is right and proper that security should be given in a way, which is least disadvantageous to the party giving the security. It may take many forms, bank guarantee and payment into court are but two of them. So long as it is adequate, then the form of it is a matter, which is immaterial. The applicants stated with regard to the issue of security that, they were ready to abide by any conditions that may be imposed by the Court. The Respondent's counsel on the other hand, submitted that the appellant should deposit the Bank Guarantee. Taking all relevant factors into consideration and in order not to render the intended review illusory, I grant stay of execution of the 11 decree, and I order that the garnishee order nisi issued be lifted on condition that the applicant shall give and deposit a bank bond guarantee of the sum of USD 33,530.50. or its equivalent amount in Tanzanian Shillings and a bank bond guarantee of Tanzania Shillings Fifty Million (T7S 50,000,000) into Court as security for the due performance of the decree. This condition is to be met within 45 days from the date of this ruling or in default, this application shall be deemed to have been dismissed with costs and the Respondent shall be at liberty to execute. The costs of this Application will be in the cause. It is so ordered. DATED at DAR ES SALAAM this 11th day of March, 2025. L. A. MANSOOR JUSTICE OF APPEAL The Ruling delivered this 11thday of March, 2025 in the presence of Mr. Robert Rutaihwa, learned counsel for the Applicant and Mr. Audax Kahendaguza Vedasto, learned Counsel for the Respondent is hereby certified as a true copy of the original. F. A.-MTARANIA >] DEPUTY REGISTRAR COURT OF APPEAL