20111010 TZCA Mwanza

IN THE COURT OF APPEAL OF TANZANIA AT MWANZA (CORAM: RUTAKANGWA, J.A., KIMARO, J.A., And ORIYO, J.A.) CIVIL APPLICATION NO. 11 OF 2010 MANTRAC TANZANIA LIMITED ...... :................................. APPLICANT VERSUS RAYMOND COSTA ......................................................... RESPONDENT (Application for Stay of Execution of the decree of the High Court of Tanzania at MWANZA) (NYANGARIKA, J.) Dated the 17th day of August, 2010 In Civil Appeal No. 39 of 2008 RULING OF THE COURT 7 & 13 October, 2011 RUTAKANGWA, J.A. The applicant was successfully sued in tort by the respondent in the District Court of Nyamagana District (the trial court). The respondent was awarded by the trial court Tshs. 98,000,000/= as general and special damages plus interest and costs of the suit. The appeal of the applicant against the judgment and decree of the trial court to the High Court at Mwanza, was dismissed on 17th August, 2010. Dissatisfied with the judgment and decree of 1 ,., the High Court,_ the applicant lodged its notice of appeal to this Court on 13th ,.. September, 2010. Pending the instituting and determination of the intended appeal, the applicant has come up with this application for stay of the execution of the decree in favour of the respondent. The application is by Notice of Motion under Rules 11(2) (b), (c) and (d) and 48(1) and (2) of the Tanzania Court of Appeal Rules, 2009 (the Rules). The applicant has cited in its Notice of Motion a number of grounds, why it thinks it is in the interests of justice to grant a stay order. First and foremost, it is claiming that its intended appeal has "high chances of success". It has assigned twelve reasons, being issues of law and of mixed facts and -law, for such a belief. Secondly, it is alleged that if the awarded colossal sum of Tshs. 98,000,000/= is paid forthwith, the applicant will suffer substantial loss. Thirdly, the applicant, which is a going on concern dealing with sales and distribution of imported caterpillar equipments and spares, has undertaken to give security in the form of a Bank guarantee for the satisfaction of the decree in the event the intended appeal fails. The Notice of Motion is supported by two affidavits sworn to by Edmund Martin Lawson, the applicant's Managing Director, and Faustin Anton Malango, its counsel. 2 ~ 1 -/ The respondent, who is represented by Mr. Bernard Kabonde, learned advocate, has resisted the application. The respondent lodged an affidavit in reply, contesting most of the averments in Mr. Martin Lawson's affidavit but not Mr. Malongo's affidavit. Before the matter came up for hearing, Mr. Kabonde had lodged two notices of preliminary objection. Each notice contained two points challenging the competence of the notice of motion. However, when the application was called to hearing, Mr. Kabonde abandoned three of the four points of preliminary objection. The remaining point which counsel for the parties submitted on was as follows:- "The application is incompetent for containing defective verification clause'~ Mr. Kabonde faulted the affidavit in support of the Notice of Motion because immediately after the paragraphs containing each deponents' averments, it is shown that they are dated at Mwanza (in respect of that of Malango) and Dar es Salaam (in respect of that of Edmund Lawson) on 3 c~ 15th October, 2010, immediately followed by the deponent's signature. To him this was an incurable irregularity because the signature of the verifier should have been immediately below the verification clause and not below the sentence showing the date when and the place where it was dated. He accordingly urged us to strike out the Notice of Motion with costs. Mr. Faustine Malango, learned advocate for the applicant, pressed us to hold that the impugned affidavits were valid both in form and substance. The alleged irregularity, he said, was an imaginary one not real. He called upon us to dismiss the preliminary objection with costs. After hearing counsel for both sides, we reserved our ruling on the issue and proceeded with the hearing on merit of the substantive application. Our short ruling on the preliminary objection is incorporated in this ruling on the substantive application. We shall first dispose of the preliminary objection which exercise, we are convinced, will not detain us unduly. This is because we are of the respectful opinion that the preliminary objection is misconceived. We have carefully gone through the affidavits of Mr. Edmund Martin Lawson and Mr. Faustine Malango. Alive to the essential features of an 4 affidavit, it is our considered finding that they are not defective either in form or substance, let alone being incurably defective. Affidavits intended to be used in judicial proceedings, are by law required to be confined to facts as the deponent is able of his own knowledge to prove and should be properly verified by the deponent. Furthermore, affidavits should be divided into paragraphs, numbered consecutively, each paragraph confined to a distinct portion of the subject. To have legal validity, an affidavit must also be sworn/affirmed before a person authorized by law to make affidavits, usually a commissioner for oaths or a notary public, who must certify in the jurat of attestation the fact of the making of the affidavit before him and the date and place when and where it was made. The two affidavits in support of the Notice of Motion have satisfied all these statutory requirements. The only problem is that the deponents were over-cautious. In between the body of the affidavit (that is after the last paragraph) and the proper verification clause, they have included a sentence to this effect:- ''Dated at Dar es Sa/aam/Mwanza this Jgh day of October, 2010'~ (One affidavit was sworn at Dar es Salaam and another at Mwanza.) 5 Then each deponent appended his signature below this sentence immediately above the verifications clause. We are convinced that the inclusion of this sentence in each affidavit was unnecessary but innocuous. As its absence would not have rendered the affidavits invalid, its presence therein does not render them defective at all. We accordingly overrule the preliminary objection and costs on this to be in the cause. Coming to the merits of the application, we find it apposite to begin our discussion with this assertion. It is common knowledge that the institution of an appeal is not a bar to the execution of the decree appealed from by the decree holder. However, relevant laws confer courts with jurisdiction, either upon application or suo moto, to grant an order of stay pending the determination of the intended or pending appeal. As far as this Court is concerned, the said powers are derived from Rule 11 of the Rules. As already shown above, this application is based on Rule 11 (2) (b)(c) and (d). The said Rule 11(2) partly reads thus:- "11-(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:- 6 (a) ( ...... not relevant. .. ) (b) i n any civil proceeding~ when a Notice of Appeal has been lodged in accordance with Rule 83, an appeal, shall.not operate as a stay of execution of the decree or order appealed from except so far as the High Court or tribunal may order, nor shall execution of a decree be stayed by reason only of an appeal having .been preferred from the decree or order; but the Court may, upon good cause being shown, order stay of execution of such decree or order. (c) w here an application is made for stay of execution of an Bppealable decree or 7 - ,_____ -----.~-- order before the expiration of the time allowed for appealing therefrom, the Court, may upon good cause shown, order the execution to be stayed (d) n o order for stay of execution shall be made under this rule unless the Court is satisfied- (i) t hat substantial loss may result to the party applying for stay of execution unless the order is made; (ii) t hat the application has been made without unreasonable dela½ and (iii) t hat · security has been given by the applicanl for the due performance of such 8 decree or order as may ultimately be binding upon him. TEmphasis is ours.] We hope it will be immediately realized that Rule 11(2) is more restrictive in scope than the former Rule 9 (2) (b) of the Tanzania Court of Appeal Rules, 1979. So most of the case law on the subject will not be relevant. The former Rule simply provided as follows:- 9 (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,'.- (b) in any civil proceedings, where a Notice ofAppeal has been lodged in accordance with Rule 76, order a stay of execution, on such terms as the Court may think just '' So, under Rule 11(2)(b), the Court may in its absolute discretion order a stay of execution of the decree or order appealed from upon these conditions being satistified or fulfilled by the applicant:- (i) a fter the lodging of a Notice of Appeal in accordance with Rule 83, 9 (ii) s hawing good cause, and (iii) C omplying with the provisions of item (d) of sub-rule 2. Has the applicant here fulfilled these statutory conditions? There is no dispute here that the applicant has already duly lodged its Notice of Appeal. We have already shown that the judgment of the High Court was delivered on 17th August, 2010, and the Notice of Appeal was lodged on 13th September, 2010. This application was lodged a month thereafter, on 15th October, 2010. It has not been suggested to us by the respondent that there was unreasonable delay in bringing this application. If such a suggestion had been raised we would definitely have rejected it. One other condition is that the applicant for a stay order must give security for the due performance of the decree against him. To meet this condition, the law does not strictly demand that the said security must be given prior to the grant of the stay order. To us, a firm undertaking by the applicant to provide security might prove sufficient to move the Court, all things being 10 l - - equal, to grant stay order provided the Court sets a reasonable time limit within which the applicant should give the same. In this case, as we have alluded to above, the applicant in paragraph 10 of Mr. Edmund Lawson's affidavit specifically undertook "to give security in the form of Bank Guarantee for a sum to be determined by this Honourable Court". In case the appeal fails, the applicant, urged, "the Respondent will have recourse to the Bank Guarantee." This firm commitment was not specifically disputed by the respondent in his affidavit in reply and we shall accordingly give it the consideration it deserves in our determination of this application. The applicant pressed that it will suffer substantial loss in its business if the stay order is not given. In Paragraph 11(b) of M. Lawson's affidavit, it is thus averred:- "The Applicant obtained a loan from Stanbic Bank ' Tanzania Limited ... in the event attachment or execution is levied against the applicant the applicant will be in default and the full amount of the loan, charges and additional interest shall be immediately due and payable to the Bank. " 11 , ~. • In response to this, the respondent stated in his affidavit that:- / ".... the applicant will not loose anything in her business and the amount of money awarded to me will not affect her business in the event decree is executed ..... H To augment the force of this averment, counsel for the respondent 11 submitted that this "was not a good ground to be determined by this court. In view of the clear provisions of Rule 11 (2) (d) (i), we can quickly say that it is a good ground in determining whether or not to grant a stay order. There is no gainsaying, as submitted by Mr. Malango, that the decretal amount is a colossal sum, being guided by the current financial turmoil and credit crunch worldwide. Not only will the applicant loose, in a split of a second, a huge amount of money thereby jeopardizing its business operations, as articulated by Mr. Malango. The applicant, which has obtained a loan of USD 6,000,000, faces an imminent danger of loosing its creditworthiness, a creditor's measure of ability to meet debt obligations, if it falls in default, as a result of the execution of the decree before the appeal is determined. To us, this eventuality amounts to irremediable substantial loss to the applicant. It is 12 • our finding, therefore, that the applicant has on a balance of probabilities, satisfied this condition. Has the applicant shown good cause to justify the grant of a stay of execution order? Unfortunately, the Rule, does not explain what amounts to good cause. However, it is our firm belief that it is less exacting than "showing sufficient cause". In cases of applications for extension of time under Rule 10 of the Rules, this Court has consistently held that illegality in the impugned judgment constitutes good cause for extending time, although bare claims that the intended appeal has overwhelming chances of success have not always been successful in persuading Court to grant a stay order. We have carefully read the grounds upon which the challenge on the soundness of the judgments of the two courts below are based. We are not in a position now to say with any degree of certitude that they are far-fetched. What will happen, for instance, if the stay order is denied, execution of the decree carried out and the Court eventually reduces the quantum of damages awarded or allows the entire appeal? Won't that success prove to be nugatory? From the facts of this case, it is our respectful finding that that would be the case. This, then, is good cause for exercising our discretion in favour of the applicant, hoping that the appeal will be instituted without undue delay, if it is 13 . yet to be instituted. Given the current Court annual calendar arrangement, the appeal won1t take long to be disposed of. All said and done, we grant this application in terms of Rule 11 (2) (b) and (d) of the Rules. We order that the execution of the impugned High Court decree be stayed pending the determination of the applicant's appeal in this Court. This order is conditional upon the applicant depositing the Bank's Guarantee covering the entire decretal amount within two (2) weeks of the delivery of this ruling. It is so ordered. DATED at MWANZA this 10th day of October, 2011. E.M.K. RUTAKANGWA JUSTICE OF APPEAL N.P. KIMARO JUSTICE OF APPEAL · K.K. ORIYO JUSTICE OF APPEAL 14 • I certify that this is the true copy of the original J.S. MGETTA DEPUTY REGISTRAR COURT OF APPEAL / 15