kibo corridor ltd vs ravji investment co ltd 2023 tzca 17432 20 july 2023

IN THE COURT OF APPEAL OF TANZANIA

ATMOSHI (CORAM: KWARIKO, J.A., LEVIRA, J.A. And MDEMU. J.A.) CIVIL APPLICATION NO. 473/05 OF 2019 KIBO CORRIDOR L T D ................ ..................................... ........ APPLICANT

VERSUS RAVJI INVESTMENT CO. L T D .................................................. RESPONDENT (Application for stay of execution from the decision of the High Court of Tanzania at Moshi) f Sum ari, 3.1 dated the 5th day of November, 2018 in Land Case No. 09 of 2017

RULING OF THE COURT 18th & 2ffhJuly, 2023 KWARIKO. J.A.: This application has been made by way of a notice of motion preferred under rules 11 (3) (4) (5) (a) (b) (c) (6) (7) (a) (b) (c) (d) and 48 (1) of the Tanzania Court of Appeal Rules, 2009 (henceforth the Rules). It is for stay of execution of the judgment and decree of the High Court of Tanzania at Moshi (Sumari, 1- Retired) (the trial court) in Land Case No. 9 of 2017 dated 5th November, 2018. The notice of motion is supported by an affidavit sworn by one Manswety Lukas Nyalu, one of the directors of the applicant. The material facts which gave rise to this application can briefly be stated as follows: The respondent is the owner of Kibo Towers Building which was leased to the applicant through a long-term lease agreement of ten years, effective from 1st April, 2015. However, the agreement stipulated that, payment of rent would commence from 1st October, 2015 to pave way for renovation of the building. In the course of tenancy, the applicant defaulted payment of rent which prompted the respondent to institute a suit before the trial court claiming among other things, a total of USD 37,800.00 equivalent to TZS. 84,294,000.00 being rent arrears plus VAT. On the other hand, the applicant raised a counter claim for payment of TZS. 684,059,833.00 being the amount spent to renovate the building. At the end, the trial court

decided the suit in favour of the respondent. The applicant was ordered to pay TZS. 84,294,000.00 being rent arrears plus VAT up to 31st March, 2017; payment of rent arrears from 1st April, 2017 to the date of handing over the building to the respondent, and interest at court's rate of 7% per annum from the date of judgment till payment in full. On the other hand, the counter claim was dismissed for want of proof. 2 Aggrieved by that decision, on 9th November, 2018, the applicant filed a notice of appeal to challenge it. While the notice was pending, on 24th July, 2019, the applicant was served with a summons for hearing of an application for execution of the decree. This prompted her to lodge the instant application on 6th August, 2018. In the affidavit in support of the application, the applicant averred that, if the execution is allowed to proceed, it will render the intended appeal nugatory and detrimental to the applicant on account that, in the dispute premises, there are valuable furniture and hotel equipment installed therein. That way, she will suffer irrecoverable economic loss. Moreover, the applicant showed her willingness to pledge all the furniture, hotel equipment and apparatus installed in the dispute premises as security for the due performance of the decree and/or any additional amount as it will be ordered by the Court. On her part, the respondent opposed

this application through an affidavit in reply deponed by one Caessar A. Shayo, learned advocate for the respondent. Essentially, the deponent blamed the applicant for her delay to institute the appeal as soon as possible until the execution process began. As regards furnishing the security for the due performance of the decree, it is averred that the furniture is not sufficient 3 for want of proof of its value. Finally, he deponed that should the application be granted, it is the respondent and not the applicant who stands to suffer an irreparable loss. Further, in terms of rule 106 (1) and (7) of the Rules, both parties filed written submissions in support of and against the application, respectively. During hearing of the application, the applicant had the services of Mr. Gwakisa Kakusulo Sambo, learned advocate, whereas the respondent was represented by Mr. Engelberth Boniphace, also learned advocate. When he was invited to argue the application, Mr. Sambo adopted the notice of motion, the supporting affidavit and written submissions to be part of his oral submission. In his submission, the learned counsel argued that, the applicant has complied with the conditions for the grant of this application as required under rule 11 (5) (a) (b) and (c) of the Rules. Submitting on the first condition, he argued that, if the execution of the impugned decree is allowed to proceed by

eviction, the applicant stands to suffer substantial loss since the hotel valuable equipment which she had installed in the dispute premises are likely to be damaged through dismantling from the building. 4 As regards the second condition regarding time limitation, Mr. Sambo argued that, the application has been filed within fourteen days as prescribed by the law. Expounding, he submitted that, the applicant became aware of the application for execution on 24th July, 2019 and filed this application on 6th August, 2019 which was the twelfth day of the notice. Lastly, is the issue as to whether the applicant has undertaken to furnish security for the due performance of the decree as may ultimately be binding upon her. It was Mr. Sambo's submission that the applicant has made a firm undertaking to provide security in the form of all the furniture, hotel equipment and apparatus installed in the dispute premises and/or any additional amount as it will be ordered by the Court. To amplify his argument, the learned counsel cited, among others, the cases of Kwamwande Village Council & 49 Others v. Paulo Parisino & Sokoriano Kipala & 79 Others, Civil Application No. 2 of 2016; Tanzania Ports Authority v. Alex Msama Mwita, Civil Application No. 196 of 2014 and National Bank of Commerce Limited v. Alfred Mwita, Civil Application No. 172 of 2015 (all unreported). From the foregoing, Mr.

Sambo urged us to grant the application with an order directing the costs to abide the outcome of the intended 5 appeal. When we probed him regarding the value of the said furniture, the learned counsel submitted that the same is stated in the judgment of the trial court which is part of the supporting affidavit. On the other hand, Mr. Boniphace adopted the affidavit in reply and the corresponding written submissions. He did not support the application. It was his contention that the applicant has not met the conditions for the grant of this application as stipulated under rule 11 (5) of the Rules. Firstly, he argued that, it is the respondent who stands to suffer loss since the dispute premises belongs to her and it has not been operative for six years now as the applicant closed her business. That the nature of the loss alleged by the applicant is unfounded and that she is only employing delaying tactics to deny the respondent enjoyment of the fruits of the decree. Secondly, the respondent's counsel argued that, this application was filed on the fifteenth day from the date when the applicant became aware of the application for execution. Therefore, it was beyond fourteen days prescribed by the law. As regards the third condition, Mr. Boniphace argued that, the hotel equipment installed in the dispute premises cannot be used as security for the due performance of the decree as

they have not been categorized 6 and their value is unascertained. Moreover, it was his contention that, since the furniture is subject of dispute between the parties, it cannot be used as security for the due performance of the decree. He referred us to the case of National Bank of Commerce (supra), cited to us by Mr. Sambo which underscored that, security should be free and independent. However, the learned counsel did not have any qualms with the firm undertaking by the applicant in respect of additional security which may be ordered by the Court. In conclusion, the learned counsel insisted that, the applicant has not met the conditions for the grant of the application for stay of execution of the decree and urged us to dismiss this application. In rejoinder, Mr. Sambo submitted that, the hotel furniture is not in dispute since what was in dispute before the trial court is rent arrears and ultimately, the decree ordered payment of rent arrears and eviction of the applicant from the dispute premises. As to the description of the furniture, he submitted that the applicant had installed furniture from fourth to nineth floor in the building owned by the respondent hence, the respondent is well aware of what is therein, thus there is no need to particularize them. 7 He reiterated his submission that, the application was filed within fourteen days from the date the applicant

became aware of the application for execution. He argued further that, the dispute premises belongs to the respondent and the applicant is no longer doing business; thus, she is the one who is suffering. He contended that, the respondent will not suffer anything since according to the decree, the rent arrears still accrue whether the hotel is operating or not. We have considered the submissions by the learned counsel for the parties, the issue which calls for our determination is whether this application has merit. For an application for stay of execution of a decree to succeed, the applicant should comply with conditions listed under the law, cumulatively. Rule 11 (3) (4) (5) (a) (b) of the Rules provides thus: "(3) In any civil proceedings, where a notice o f appeal has been lodged in accordance with Rule 83, an appeal shall not operate as a stay o f execution o f the decree or order appealed from except so far as the High Court or tribunal may order, nor shall execution o f a decree be stayed by reason only o f an appeal having been preferred from the decree or order. (4) An application for stay o f execution shall be made within fourteen days o f service o f the 8 notice o f execution on the applicant by the executing officer or from the date he is otherwise made aware o f the existence o f an appiication for execution. (5) No order for stay o f execution shall be

made under this rule unless the Court is satisfied that: - (a) substantial loss may result to the party applying for stay o f execution unless the order is made; (b) security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him." The cited provision of the law has been affirmed by the Court in its various decisions, including Mohamed Rajuu Hassan v. Almahri Mohsen Ghaled & Two Others, Civil Application No. 570/17 of 2017; Mohamed Masoud Abdallah & Sixteen Others v. Tanzania Road Haulage (1980) Ltd, Civil Application No. 58/17 of 2019 (both unreported); and, National Bank of Commerce Limited (supra). The first condition which the applicant ought to have fulfilled is to file the application within the prescribed time of fourteen days after she became aware of the application for execution of the decree. Contrary to the contention by Mr. Boniphace, this application was filed timely as 9 required by the law. This is because, the applicant became aware of the application for execution on 24th July, 2019 and when the instant application was filed on 6th August, 2019, it was the thirteenth day; thus, before the expiry of fourteen days. Second, the applicant has managed to show that, if execution of the decree is allowed to proceed, she stands to suffer substantial loss. Unlike the respondent who is the owner of the

dispute premises and is counting rent arrears as it was decreed by the trial court, should the applicant be evicted from the disputed premises, the furniture that he had installed will be thrown out, probably, haphazardly which will have the danger of being damaged. The requirement in the third condition is for the applicant to give a firm undertaking that she is ready to furnish security for the due performance of such decree as required under rule 11 (5) (b) of the Rules. In the case at hand, it is not disputed that the applicant has undertaken to furnish security. He has pledged all the furniture and hotel equipment installed in the dispute premises and/or any additional condition as may be ordered by the Court. The respondent's counsel argued that, since the value of the furniture is not known, it cannot sufficiently be furnished as security. While we agree with that assertion that the value of the furniture 10 is not known, it is established law that, a firm undertaking by the applicant to provide security might be sufficient proof to move the Court to grant the order of stay of execution. See for instance, Mantrac Tanzania Ltd v. Raymond Costa, Civil Application No, 11 of 2010 (unreported). Moreover, since rule 11 (5) (b) of the Rules is not specific on the type or amount of security to be furnished, it means it is in the discretion of the Court to determine security to

be provided depending on the circumstances of a particular case. Giving effect to this rule, in the case of B. R. Shindika t/a Stella Secondary School v. Kihonda Pitsa Makaroni Industries, Civil Application No. 26 of 2019 (unreported), the Court stated thus: "That Rule leaves it open to the Court to exercise its discretion in determining reasonable security to be deposited. We are well aware that the discretion is to be exercised judiciously. The amount to be deposited will therefore very much depend on the circumstances o f each case." Following this decision, although the applicant has not shown the value of the said furniture, its existence is not disputed, and we find that it is not part of the dispute between the parties herein as alleged by the learned counsel for the respondent. We therefore accept it as security for the due performance of the decree. Apart from that, since the value of li No, 9 of 2017 of the High Court of Tanzania at Moshi be stayed pending the determination of the applicant's intended appeal before this Court. This order is conditional upon the applicant depositing to the Deputy Registrar of the High Court a Bank Guarantee in the sum of TZS. 40,000,000.00 within thirty days of the date of delivery of this ruling which is in additional to the furniture installed by the applicant in the dispute premises. Costs to abide the outcome of the intended appeal. DATED at MOSHI this 19th day of July, 2023. M. A. KWARIKO

JUSTICE OF APPEAL M. C. LEVIRA

JUSTICE OF APPEAL G. J. MDEMU

JUSTICE OF APPEAL The Ruling delivered on 20th day of July, 2023 in the presence of Mr. Gwakisa Kakusulo Sambo, learned counsel for the applicant and Mr. Engelberth Boniphace, learned counsel for the Respondent, is hereby certified as a true copy of the original. .c A P P i? ^ Clpfel n m m * v ^ ^ > 7 SpftOR DEPUTY REGISTRAR r s// COURT OF APPEAL