jomo kenyatta traders ltd others vs national bank of commerce ltd 2018 tzca 350 24 november 2018

IN THE COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM (CORAM: ,MMIlLA, l.A., lIlA{'J.,A., And WAMBAlI, J.A.,) crvn, AP'PlICATION NO. 259 OF 2015 1. lOMO KENYATTA TRADERS LIMITED 2. MDI KASHIGO KIVMtII\ 3. MICHAEL KIMWAGA 4. WILLIAM GEOFREY KIMWAGA ••••••••••••••••••••••••••• II.a •• APPlICANTS 5. MONICA KIMWAGA 6. MWANAIDI SALUM BUSHIR VERSUS NATIONAL BANK OF COMMERCE LIMITED .........•..........•..••...•••. RESPONDENT (An Application for Stay of Execution from the Decision of the High Court of Tanzania, at Dar es Salaam) (Mwa·mbegele, J) dated zs" day of October, 2015 in Commercial Civil Case NQ. 64 of 2007 RULING OF THE COURT so" october, .2018 & 4th January, 2019 .2015, are seeking for an order of stay of execution, of the decree of the High Court of Tanzania {Commercial Division) in Commercial Case No. '6~ of 2015 dated 29th October, 2015. 1 The Notice of Motion is supported by an 'affidavit of Jerome Joseph fJisernw'a; the learned advocate of the applicants. The Applicants also filed "fnvvritten submissions in support-of-the application. On the rival side/ the .. '. ,y, i, Respondent also filed an affidavit in reply as well as written submissions in reply opposing the application. The notice of motion discloses three grounds upon which the application is based. For reasons to be apparent soon and for ease. of reference, we take pain to recite the three grounds and the -supporting affidavit. The grounds upon which the application is based are: success. That the suit did not fall under order XXXV-summary procedure as evidenced in the summary Judgment dated 2gh October2015. 1"' .:c_- .("1I~~-~ ._."c./~.,'-t.,1d?_"'''';:'.· ,.'t._" ,;. r "'~ • (ii) There was no evidence taken r.. and or no trial of the case was conducted in the circumstancesof the case. 2 "2. The Applicants will suffer substantial and inepersble . :. " ,,= '. , loss which cannot be atoned by way of ',,- , ."'~-:- damages. (i) In the likely event that' the' appeal succeeds recovery of the applicant properties which have been advertised for sale will be a matter of grave doubt. 3. The summary judgment of the High Court raises very important points of law which call for the determination of the Court of Appeal as there was 170 evidence tendered in court when the said summaryjudgment was entered rr The averments in the affidavit in support of the application are: 1. That; as deponent I am conversant with facts to be deponed hereunder: '."- ,.,;;..",d'I"w...-.e;"'..••. ~.t.:,~<',oi'lc,·-·;. ..',·lo.tr .•.•. 01'''/1'' "P 2. That; on 2gh day of OCtober2015 the High Court of i' '1<. ,.i-J Tanzania/ Commercial Division at Dar es Salaam in CommercialCase No. 64 of 2015 before Mwambegele/ , 'J. passed a summary judgment in favour of the , ' , Respondent. 3 Copies of summary Judgment and Decree are attached hereto and marked A and B respectively and leave is craved to form part hereof. 3.· Tbet=the : 'Applicants after being aggrieved wltt: ttie said summary judqment; on 24h November 2015 have applied to be supplied with certified copies of proceedings/ judoment; decree and order for the purposes of appeal. A Copy of a letter dated 24!li November 2015 is attached and marked ''JJ-l'' and leave of the Court is craved to form part of this application. 4. That on 24h Nove177ber 2015, the Applicants field a JI/_L: .c A I __ -' 1:.--' c__ -. ,..."',...,., .I"'1t: IVULlU= UI /-tfJj...IeC11 C1/JU C1fJfJIIC:U lUI a LUpy VI judgment/decree and proceedings for the purposes of appeal as required by the law. A copy of a Notice of Appeal is attached herein and marked I'JJ-2" and leave of the court is craved to form part of this application. • ,,' ·-~-"".'Ot·."·,f,1Cr "";'~:';'~~""(_:"'. ,.... " -"I ..!': .. '5. Thet; if the stay order is not granted the outcome of v. . the intended appeal would be rendered, nugatory in the event the appeal succeeds in favour of the Applicants. as Respondents intends to sell Applicant properties, Certificate of Title No. 82051 on Plot No: ,', ~'\ 4 1197 Block "C" Mtoni Kijichi Area/ Temeke Municipality. Dar es Salaam in, the name of ;rd Applicant Certificate of Title N(,J. 42715 on term No. 2554 "Kibamba Area/ Kinondoni Municipality. Dar es salaam in the name af the 3'd Applicant and Certificate t -, _ ., • ~., _#"" d. _ >' . "', '. _ ",," ,_, • ~ of Title No. 42499 on farm No. 2553 Kibamba Area/ Kinondoni Municipality. Dar es Salaam in the name of the 4h Applicant and Certificate of Title No. 42497 on Farm No. 2555 Kibamba Area/ Kinondoni Municipality. Dar es Salaam in the name of the gh Applicant. In this reaerd. the Applicants will suffer substantial irreparable loss if stay of execution is not granted A Copy of Mwananchi Newspaper dated 1/1h November 2015 advertising for seie of applicants houses is annexed hereto and marked .1.1-3 and leave is craved to form part hereof. 6. That on ;rd June 2015 the Respondent filed Plaint under Order XXXV - Summary Procedure against the ApIJlicants for the judgment and Decree as follows; -<>'-"1" '::''',~_''''''''<:'' ;."t'" ,,01 ''<.:l."qd!,.lj!~,~y.''''';_;'4~'':~~'.(!. "". I! . a) Payment of the sum of Tenzsoie Shillings One Billion Thirty 77wo, ,. , .;:. Million six hundred Ten thousand ninety nine. and Cent Twenty one (TZS 1/032/610/099.21) being the 5 total outstanding amount on account of the Multi Option Facility Commercial Terms and the Term Loan Commercial Terms' granted to the i" Detendentes. at December 31,2014 b) Interest on the above at the contractual rate from December 31,2014. c) Interest on the decretal amount at the rate of 7% from the date of judgment to the date of judgment. d) Cost of the suit to be borne by the Defendants. In the alternative and upon failure by the Defendants to pay the amount in (a) above. e) .• - Ap'PQint'Tlent ."'t, -," ",,_,~ .. ' , of Mr. Saddock Magai :'-, , as a . ,-,~,.~;,-'.f.\;V'~~""'~_":_'::I. ... '.'~·2 ~, receiver manager with powers to sale the mortgaged properties to wit, property: Title No. 82051 on Plot No. 1197 Block "C" MtoniKijichi Area, ... Temeke Municipality, Dar es' Salaam, 6 property Title No. 427151 on Farm No. 2545 Kibamba Area/ Kinondoni Municipali~ Dar es Salaam and property Title No. 42497 on Farm No: .2555 Kibamba A(t;a/ .: , Kinondoni Municipali~ Dar es Salaam. f) Appointment of Mr. Sadock Magai as a Receiver Manager over the assets charged under the debenture; g) An order for vacant possession of the mortgaged properties on property title No. 82051 on Plot No. 1197 Block lieN Mtnni ...... _ .... Kiiirhi ".J._ ... ;:/rPri -- --, TpmPKP . ._.... _ ...- -IVIImidoelitv. ._.-- --,. ", Dar es Salaam/ property Title No. 427151 on Ferm No. 2554 Kibamba area/ Kinondoni Municipali~ Dar es Salaam/ property Title No. 42499 on Farrn No. 2553 Kibamba Area/ Kinondoni Municipa/.itv", . . "l?ar. . es . Salaam and property Title No.' 42497 on Farm No. 2555 Kibamba; ,~rea/. Kinondoni Municipali~ Dar esSsteem. 7 h) Payment of the balance of outstanding amount minus the amount to be recovered (Torn the sale of the mortgaged property at (d) and (e) above; i) Costs of the suit; and j) Any other reliefs which the Honourable court may deem just to grant in favourof the Plaintiff. 7. The Applicants filed an application for leave to appeal and defend the suit on yd July 2015. However, the said Application was on 2dh October 2015 struck out on ground thet no correct provision of the law movtnq the court to grant the orders sought was cited. A copy of court Ruling and drawn order is annexed hereto and marked JJ-4 and JJ-5 and leave is craved to Form part hereof. 8. 'On 2!fh October 2015,·· a day - afi/eF delivery of the , - ruling and before the applicant could file an J . -. : Application for extension of time to file ad application for leave to defend the suit; the court entered -summary judgment against the Applicants without 8 hearing evidence of Respondent'S case and without , giving sufficient time to etlowthe applicants to re-tite an application for leave to defend the suit. The applicant" had already ~prepared application tot extension of time for leave to defend the suit and fees assessment having been made by the court; only to be given with the summary Judgment. Copies of draft Application for extension of time to file an application for leave is annexed hereto and marked JJ-6 respectively and leave is craved to form part hereof. 9. That affidavits in support of an Application for leave to appeal and defend the suit shows that the respondents are not entitled for summery judgment as entered by the court because the respondent was in breach of the terms of the credit facility Agreements and that a prayer for appointment af Saddock Magai a receiver manager did not fall under the provisions of summary suit an important point of . lew fft,kJ('.determination ot tneCourtotApoesl, .. ,F - • ,~<: _. : ._ _ . _. -, ;","",' - .f. " _ "~:'~'.:;':. _. - .~ "i" __ #4 'cojJY·ofChamber Application andAffidavitsin supportr.thereot is annexed hereto and marked" JJ-7 and leave is craved to form part thereof. . ,- ':- t'" . ._~ . .- .•... -"1 9 10. That in the circumstances of this csse.. grant of .. prayers sought for is necessaryas the Applicantshave been denied their basic right to parsue their rights in ,." . '.' High Court because' of the hurriedly summary judgment entered by the court. 11. Tbet; the Applicants intended appeal has a prima facie likelihood of successas the Applicants are not in breach of any term of the mortgage agreement and that the suit did not fall under order XXXVsummary procedure as evidence ill the summary Judgment dated 2g:h October2015. 12. Thet; the Respondent are about to enforce decree originating from the summary judgment which was delivered on 2911 October 2015 against the Applicsnts despite the fact that the decree/judgment did not conclusively determine the rights of the matters in' controversy in the suit. Also, the Judgment is uncertain and incomplete, its execution being dependent upon future actions as shown in the , -". ~. - J.,#'. ••. : Before us, at'the hearing of the application, were Mr." Mohamed - ~,".~. "'f ' ~.- "_~"",,,. •• G;"~ .e\oj..- ~-~: •• Mkali, the learned advocate+who appeared for the applicants and 1\1s. Samah Saiah,the {earned advocate, woo appeared {PI tb,e respondent. 10 Mr. Mkali was the first to address us. He adopted the contents of both the affidavit and subrnlssion in support of the notice or" motion and urged the Court tnJgrant the application with costs on the bases of the contents therein. In both the adopted affidavit and written submission, the applicants contended that the claims of the respondents in the High Court did not fall in the summary suit category of cases and they are not in breach of the mortgage agreement with the respondent. The applicants also contended that the Court entered judgment without giving them sufficient time to apply for extension of time so as to re-apply for leave to appear and defend the suit after the first one was struck out for failure to cite a correct provision of the law. That, in their view, denied them their constitutional right to be heard. They also asserted that the appointment of Sad dock Magai as receiver manager did not fall under the provisions of summary suit. On account of these shortfalls, the applicants contended, their >{o ,.. <$,' ," further, contended that the respondents are about to enforce the decree 't" 'by selling the listed landed properties hence the need for the grant of an order staying the execUti'o rr: 'Ih support of their arguments they 'referred 11 the Court to the decision in the case of THE UNVERSITY OF DAR ES . SALAAM v, RICHARD .KAJUN/t'MUZO, Civil Application No. 117 of .. 2001(unreport2d).,;· ", On our proh1ptrng;Fir~ iVlkaii readily conceded that the applicants have not, in both the notice of motion and its supporting affidavit and the written submission, expressly indicated that they have furnished or made a firm undertaking to furnish security for the due performance of the decree. He was of the view that the applicants would furnish security after the Court has ordered so. 1In1 oppositlon U::'ILII, ,\,1'- I I::>.S QIQII ... , ... I. . W"'- Q::> brief ... _-' foci I el QIIU ised She I LU::>C. IIC;, at- L first- III L, ::l~r\nt-o~ UUVI-''-\'''U h~4-1.... 4-1....~ UVL" L"t:: ""4+irl ....• "if- a"luaVIL in III t'"nnl\l ICI--'11 -::>nrl t-h,.,. UIIU Llle; reolv I 1--'11 if-t-on YYIIL'-\...II \Af •• Cllhmic:c::inn oJ\A...,Il ••••••••••• ~ •• .::Inri ~ •• ~ thPn _ •• _ •• proceeded to argue against the grant of an order of stay of execution. She was emphatic that the applicants have not complied with the mandatory requirements for the grant of an order of stay of execution as provided under Rule 11(2)(d)(i) and (iii) of the Tanzania Court of Appeal Rules, 2009 ":";'."': • r ':;.~: 1·-~~:7:{~';::~·;.t);~./ :./ \ , .•... '1' •. ,., _ (the Rules). Amplifyiqg,·,'Ms. Salah had it that the applicants iQ both their affidavit and submission in support of the application merely asserted in paragraph :. -~,';:" c'(_"j"'~:r~J ',Hi;" r,>Y-'.· ~t~, .• ·.:. ":"'~." ,~:"_'(;--~'.r;.! , ..~~~: .•.;;... "\\ "'f'~ \ 5 of the affidavit that they will suffer substantial loss if the listed properties ~,.', .\ .~ .' '. 12 are to be sold without providing the details and particulars of the alleged loss: In bolstering her assertion she referred usto the decision of the Court J,,~))n thecase of Tanzania .cotton Market!ng. Board v. Cogecot. Cotton .,." .,', ",~o Sa [1997] TLR 63., In respect of furnishing security for due performance of the decree, Ms. Salah submitted that the applicants did not, both in the affidavit and submission, either established that they have furnished security or made a firm undertaking that they are ready to furnish security in compliance with Rule 11(2)(d)(iii) of the Ru!es. She referred us to the Court's decisions in Mantrac Tanzania Limited v. Raymond Cosa, Civil application No. 11 of 2010, Ahmed Abdallah v. Maulid Athuman, Civil Application No. 16 of 2012 and Geita Gold Mining Limited v. Twaib Ally, Civil application No. 14 of 2012 (all unreported). Submitting in respect of the applicants' intended appeal standing better chances of success on appeal to the Court on account of the explained -j! .'.' " ',~'~_,,:.,;., . ,:r'o", ,;,I. _"j""'.:.;;1- " _', ~ .....• ' ". f - , •• ,~. ~...._: •••••, ... " .,.... .' n. • ,4 _.- 't_ .•... I.., ','., .,.~. ~, •••,(.., -. • shortfalls, Ms. Salah contended that apart from the applicantsnot disputing being granted thetermloan, it is not one of the conditions forthe grant of ••: 1 ~ •• ~,' ': ' "". ..' I .-_ '.:. : • .-.: stay of execution as they are matters to be dealt with on appeal. In ." ""p~, ... ,, 'T'" .",. 1":;'- conclusion, she said that the applicants have not complied with the 13 conditions for grant of an order of stay of execution." She accordingly urged the Court to dismiss the application with costs. . .. -. in rejofnder~" Mr. ' Mkali impressed upon' fhe CbUrt tc{ determine the' ,-, 'HT' i' -, ;.;.",~,., ,,- appticationon the basis of the adopted affidavit and written submission as" he had earlier on intimated. We have given due consideration to the rival arguments of the parties. In resolve we first wish to expound the legal position obtaining in grant of an order of stay of execution. The present application was lodged, as indicated above, on 8/12/2015, which is before the Rules were amended by Government Notice No.362 of 2017. By then, an application for stay of execution of a decree pending the determination of an appeal could be stayed when the factors as were provided under Rule 11(2){ d)(i) to (iii) of the Rules were complied with. That Rule provided that: "·11 "'2·) ,':--i'\ ,II:'''' ""':'"·!~":'-·::'·'r-·' S"L'' a' y of execution sha.l-be '::;c" "."" ,-, ,.:::~':;-':;;"., \. ~ \.U". .. ~ Iv "--'1' ..•1\,•...•• I \..I II . made under this rule 'unless the Court is satisfied :- - that, subs.tantial loss may result to the party applying for stay of execution. ...:.,,';,·.".'1';- 14 fi) 1./ that the application has been made wffhout '<' ,':"',< unreasonabledelay/ and ,,1 ,. +'(iii) that 'security has been given by the applicant for .... ·f.· •.. ·-..'.·.,..iO· .•••. · .'.r(~ .••.. ,., '-A~"_6'~"(" ." ..•••.. ~ ~ the due performance of such decree or order as may ultimately be binding upon him. A quick glance on the quoted provision will show that the onus is on the applicant to demonstrate the existence of the factors or circumstances justifying the grant of an order of stay of execution. It is, further, explicitly clear that there are hard and fast conditions set out in the Ruie which shouid mandatoriiy be satisfied before an order staying .. , . ~ execution is made and the Court has on several occasions pronounced that those conditions must be complied with cumulatively - See National Housing Corporation v. A. C. Gomes (1997) lTD, Civil Application No. 133 of 2009 (unreported) and Mantrac Tanzania limited v. Raymond Costa (supra). . - I.: ." -t c .1..) , We; in the light of the above legal position: now turn to consider whether the applicants have complied with the concitions set out under '.'; Rule:11(2)(d) of the Rules . ." VVe Will start riff - whether "the' -~l'pplicants have successfully - - demonstrated that they stand to suffer substantial loss if an order of stay of execution is not granted. The applicants averred in paragraph 5 of the affidavit that if the stay is not granted the outcome of the intended appeal would be rendered nugatory in the event the appeal succeeds in favour of the applicants as the respondent intends to seii the applicants' landed properties. He then •• ,,...., •.. .• .f- _...., ,__ I~.-"_ ..1-1-___ J\I •.• 1-': __ .1 _,_~_;, __ .t= I-h . . . .•. 1 .J..._ h'"'- .1"'"<' ,U"""I""_A VVCIIL VII t.v II~L u icu r. I~U pcn uc.urcn » VI UC\.dll::::> VI Ule: IV;:';:' LV UC ;:'U1ICIC:U have been explained. All that we can say as was Ms. Salah, is that the applicants merely asserted suffering loss without more. This was quite unsatisfactory and the Court has in the case of Tanzania Cotton Marketing Board v. Cogecot (supra), insisted that applicants must go . .,,,. beyond the _ staqe of vague .assertion that loss would be -sufferedif stay order is not issued. They, .instead, have to provide satisfactory details and particulars specifying the alleged loss. We, in the event, agree with Ms. Salah that that onus was not sufficiently discharged. 16 In respect of furnishing security: as hinted above, Mr. Mkali conceded that the applicants have neither furnished nor made a.firm undertaking to "furnish securlty.jor due performance of the decree. The Court, in the case of. Man.tr;:!)c Ia.Q,,:zania limited v, Raymond <;,Q,~ta,,{sl).Rra), as rightly submitted by Ms. Salah, made it clear that furnishing of security is a necessary condition and that even an express undertaking by the applicants would suffice. As to what is the obtaining consequence of failure to either furnish or make a firm undertakinq - to furnish securitv, - the Court categorically stated in the case of Efficient Freighters (T) LTD v. Gargo Management and Logistics (supra) that the application cannot As can be gleaned from grounds 1 and 3 upon which the instant application is based, paragraphs 7, 8, 9, 10 and 11 of the affidavit and written submission in support of the application, the applicants have raised as a factor to be considered before grant of an order of stay of execution that the summar{"'judgmenf of the High Court' is wan~ffhg fb(:;'Ui€ "". ,,, r.: ~.- .!.,-. .•••• " aforestated shortfalls which allegedly make the chances of the intended .. ;"_:' ,. ~": . .", .- •.."._j':' ~'+. .,;:. _~,~ . ~.~,1. rr . .: U ':,u:>~< 1 '~~ •• I,-~'·.el' appeal succeeding overwhelming. We respectively agree with Ms. Salah that this is notone-of the conditions to be considered before the stay order 17 is made in terms of Rule 11(2)(d) of the Rules. It seems the applicants relied on the conditions that were set by the Court.in accordance with Rule v9(2eJ'of the-Court of-Appea! Rules, 1979 (the Old Rules) whose ,wording was diJfe.ren~ allQ. gay~, the Court wide discretlon to de,~iQ,ing .yvbgth.~f or not to _ grant stay. That Rule provided that; " 9 - (1) ( not relevant) (2) Subject to the provisions of sub-rule (1), the institution of an appeal shall not operate to suspend any sentence or to stay execution but the Court may- (a) ...............................................(not relevant) (b) , civil ,oroceedinas. In anv _, , where a notice of appeal has been lodged in accordance with Rule 76 order a stay of execution on such terms as the Court may think just:" (Emphasis added) It is apparent that the provisions of Rule 11(2}(d) of the Rules are, as alluded to above, restrictive in scope than Rule 9(2) of the Old Rules, ••• • ...'i" ••.•• ~"" ',f. o'!',',' 'f \", .,_, ;_" ''';'''''fl _ r·'4_'- ." for, they expressly establlshed. a set of factors to be considered by the (', Court- before an order of stay is granted - See Efficient Freighters{T) LTD v. Gargo Management and Logistics, Civil Application No. 145 of 2013 (unreported). 18 In cementing -the legal position that chances of the intended appeal standing an overwhelming chance.rof success on appeal not b~jng a condition to be.eonsidered before an order of stay is "granted, 1b_e".CGurt, ,j,n .•,,:. the case of ElI,adiusTe$~a v. Justin Sekumbo, Civilapphcation J~9. 158,." of 2007 (unreported), declined to consider that condition and reasoned that it was not the proper time to test the validity or correctness of the High Court judgment. Further, on the point, in another case which was decided much earlier of Tanzania Posts & Telecommunications Corporation v. MIs H. S. Henritta Supplies [1997J TLR 141, the Court made it clear that: " It is however relevant at this juncture/ to reflect that this . Court has on numerous occasionstaken the view that the chances of success of an intended appeal though a relevant factor in certain situations/ it can only meaningfully be assessed later on appeal after hearing arguments from both sides.rr The above stance, with which we fully subscribe ourselves, is also in '.;_. ,"(~,' 'tiO€,with,Ms.: Salah's argument that the alleqed shortfalls, in the High Court judgment are matters to be considered on appeal. 19 : In these circumstances,' we are satisfied that the applicants have falledto prove that they stand to stiffer substantial loss and also have not . ~j~; .. ; • of the decree. The application, therefore, . lacks merit. It is. af:~9rdingly' ',' .. , ', .: ' ¥ ~ , .' ~. • .•• ~, ._ I;. .,- • dismissed with costs. DATED at DAR ES SALAAM this 24th day of November, 2.018. B. M. K. MMILLfl. JUSTICE OF APPEAL S. A. LILA JUSTICE OF APPEAL F. L. K. WAMBALI JUSTICE OF APPEAL . s= , "', ~ ~.~ 'f .; .•.• 20