20150325 TZCA Dar es Salaam 1 1

• ... 1JHECOURT. OF APPEAL OF TANZ-ANIA----- AT DAR ES SALAAM (CORAM:KIMARO,IA. LUANDA, J.A. And JUMA, VILAFFL1CAflQ.NJiO, 214 OF 2014 SYMBION VERSUS EAST AFRICAN CAB LES L1"D ..... ................................................. RESPON DENT (Application for stay of execution from the decision of the High Court of Tanzania at Dar es salaam _••••• .4rIakaramba.,1.) . .-----.. Dated 21st November, 2014 In Commercial Case No. 91 of 2014 RULING OF THE COURT 20 & 9th MARCH 2015 JUMA, J.A . Placing reliance on the provisions of Rule 11(2) (b) of the Tanzania Court of Appeal Rules, 2009. (the Rules), the applicants, SYMBION POWER LLC and SYMBION POWER TANZANIA are by way of notice of motion seeking a stay of execution of the Judgment and Decree of the Commercial Division of the High Court of Tanzania in Commercial Case No. 91 of 2014 (Makaramba, 3.) dated 21st November, 2014 pending the determination of ism -* Themotion-s-supper-tedby-twosupporting.-affidavitsTheffrstaffidavit was affirmed byJir. Rajappan Ajith Kumar, the 1st applicant's Financial Controller. Mr. Magesvaran Sübrai -naniam, who is the 2nd applicant's Chief -- Executive- Officer, affirmed the secondaffidaVit:The motion is premised on the following grounds: - 1. The judgment and decree of the /-llgh Court of - Tanzania,—Commercia/ Division (HonourabieMrJustice Makaramba) given at Dar es Sa/aarn on the 213t November 2014 is problematic in that the court jumped to enter a summary judgment when the suit a/though filed as a summary suit, it did not meet any of the criteria set in Order XXXV of the Civil Procedure Code, cap 33 R. E. 2002. - 2. Furthermore the summary judgment and decree is problematic because the Respondent had pleaded in paragraph 5 of the plaint fl/ed under summary procedure that 'orders, in voices, proof of delivery payments forming part of records. ... sliall be adduced before the hearing,' but surprisingly the trial judge hastily provision of order XXXV of the Civil Procedure Code, Cap 2 _ _ 33 RE. 202 and-without-seeing-and- evaluating the crucial- documents mentioned in paragraph 5 of the Summaty Plaint which the Respondent imperatively pleaded to - prave-its c/aim. 3. The summary judgment is problematic because the affidavit of Peter G'athercole fl/ed on behalf of the 2 0 ' Applicant in the application for leave to appear and defend - separate legal entity and had no business transaction with the Respondent a fact which the Respondent conceded. Having conceded that the 2 1d Applicant was a separate legal entity with no business dealings with the Respondent, the trial court grossly erred to enter a summary judgment ......... - without examining the pleadings and the documents attached thereto. The Applicants will suffer irreparable loss if the Respondent execute the said summary judgment and decree which on the face of the record appears to be tainted with illegalities. 3 --.------- ...- -- The two officers of the applicäñts have affirmed the reasons why the applicants failed to file their written statements of defence by 291h September, 2014 leading up to.: the summary judgment of the trial court. It was due to what they described as "unforeseeable human error". The supporting affidavits also affirmed that the applicants are still determined to - appeal against the summary judgmentbecause of the huge sums of mony which was awarded to the respondent EAST AFRICAN CABLES LTD without hearing the two applicants. They expressed their belief that the best interests of justice and the balance of convenience are both in favour of a stay of execution pending the determination of the appeal. The respondent has opposed the motion. Mr. Joseph Hunja, the General Manager of the respondent company filed an affidavit in reply defending the summary judgment pointing out that the applicants having lost their opportunity to file their written statement of defence, the trial court was fully entitled to enter the summary judgment. The deponent maintained that it is the respondent who is suffering because, having supplied the goods, the applicants have failed to reciprocate by paying up the money for the use S. 4 - ---------T-he-backgrcund facts leading to this application -traces-back to 1st August 2014 when the respondent initiated the suit under summary procedure in terms of Order XXXV of the Civil Procedure Code 1 Cap 33 R.E. 2002 (the CPC). The applicahts, according to the plaint, had nOt only acknowledged the debt owed to the respondent, but had also pdged to pay up. The respondent asked the trial court to order the summary judgment - and decree against the applicants for sums of USD 2,292,800.14 and shs. 282 708500 -together -with--interest -T-he-app]icants-applied-for -leave -to- defend the summary suit when on 2nd September, 2014 they filed the Miscellaneous Application No. 216 of 2014. When that suit was called up for a mention on 8th September, 2014 the respondent conceded that there were triable issues and as a result the trial court granted the applicants leave to appear and defend the suit:by filing their written -statement of defence by 23td September, 2014. The applicants did not file their written statement of defence as scheduled. Instead, they applied for an extension of time to file their defence. Makaramba, J.:dismissed the application for extension and entered a summary judgment against the applicants. This prompted the applicants to file a notice of appeal to this Court on 26th November, 2014 and thereafter filed this motion on 11th December, 2014. 5 - Whenthemotioircameup for hearing before uson_20tMarchi20i5, the applicants were represented by Mr. Senen Mpo.nda, learned counsel, whereas, Mr. Deo Ringia learned counsel, represented the respondent. In 'cOmpliance with Rule 106 (1) governing presentation of written submissions,' the two learned counsel hadearlier filed their respective written submissions, which they adopted to elaborate their respective positions on the motion. Mrlvlpouda-exp'lained that from the totaliW'of'th'e -affidavit-and written submissions, the motion by the applicants for a stay of execution is premised on three salient grounds. Firstly, it shows that there is a pr/ma fade chance that the intended appeal by the applicants will succeed. To support his position he referred us to thedecision of the Court in Ignazio Messina & Another vs. WiI!ow & Another, Civil Reference No. 8 of 1999 (unreported) to reiterate the principle that an order of stay of execution is invariably granted if refusalto do so would render the appeal nugatory. Secondly, Mr. Mponda contended that it is the applicants who will suffer irreparable loss should their motion be denied by the Court. Thirdly, on balance of convenience, the applicants will suffer more harm should the Court refuse to stay the execution of the Decree. The learned counsel placed legal principles which should guide our determination of the instant 6 application before —us He-- specifically cited a statement—of--Faw--In--- Consotidated Holding Corporation vs. Chani Auto Garage, Civil Application No. 61 of 2001 (unreported) where this Court stated: "... it is now settled that in granting stay of execution, the Court is guided by the following factors; first, whether the applicant would suffer an irreparable loss which would not be adequateiycornpensated by way of damages,second, whether the intended appeal prima fade has chances of success and thirdly, the balance of con venience/' While Mr. Mponda does not dispute that ordinarily, the respondent as a judgment crecfltor should: not be deprived of the fruits of a judgmentthat is in its favour, but he was quick to add that the judgment subject of intended appeal is so patently faulty and problematic that it cannot be said to be justifiably fruifful to the respondent or fair to the two applicants. To elaborate, the learned counsel invited the Court to glance at the face of the summary judgment and the Court will, without delving into its merit, will realize that it does not meet the criteria for summary suits set down under Order XXXV of the CPC. The learned counsel was also concerned why the 7 -----triaF-court could proceedto -enter-a--surnmary-judgment supposedly under--- Order XXXV of CPC where the. respondent had not only conceded that there were triable issues, but where the respondent had also not exhibited as evidence the documents attached to the plaint. Acordiiig tMr. Mponda, contents of the documents: which the respondent attached to the plaint required to be proved as evidence. Submitting in ieplyMrRingiaoutlined several factorswhichhe ----- employed to urge us to deny. the applicants their motion for a stay of execution. The learned counsel insisted that the applicants should not be granted a stay because they have not satisfied the requirements of Rule 11 (2) (d) of the Rules requiring them to show substantial loss that is likely to face the applicants should the stay be declined. Mr. Ringia also submitted that the applicants have failed to give security for due performance of the - Decree should their intended appeal fail. In so far as substantial loss is concerned, Mr. Ringia insisted that it is the respondent company which is suffering substantial loss from the failure of the applicants to pay for goods they acknowledged receipt. He disputed Mr. Mponda's claim that the order for stay should be granted because the 8 --.---.,,- ----appiicants'-multi-billion plants will meetth -edemarrdsofthe Decree should the impending appeal be dismissed Mr. Ringia submitted that because the affidavits of the applicants did not pledge any security should: the impending appeal fail the respondent stand to lose out. To cement. his submission that it is the respondent who had suffered and wlll continue to suffer substantial loss than the two applicants, Mr. Ringia referredstoamearlterdecision of the Court in Mrs. Wajibu Mangungu & Othersv. National Bank of Commerce Limited, Civil Application No. 99 of 2003 (unreported) to contend that after successfully securing a judgment of the trial court, the respondent should not be denied fruits of its success. According to Mr. Ringia, that fruit came after the two applicants failed to file their written statements of defence Jeavng the trial Judge with no option other than to enter the summary judgment. The basis of the summary suit, he submitted, was the promissory note referred to in the sixth paragraph of the plaint and also reliefs which the respondent identified in, its prayers. Mr. Ringia disagreed with the submission made on behalf of the applicants suggesting that the summary judgment is problematic. 9 ____ - ----Mr.--Ringia-conduded his s: ubmissioflSb urgi tIWCUftt1it should it be minded to grant the stay of execution, the--applicants should be made to deposit the decretal sums as security for due performance of the Decree subject of an order for Iñhfsl - éjöinder on issue of security for due performance, Mr. Mponda preferred to let the Court determine the security that is appropriate. ------ From-submissions of the. two learned c nseWe must begin from the premise that the discretion of the Court to grant a stay of execution of a decree or order upon good cause being shown, is spelt out under Rule 11, which provides: 1L-(1) .. .. (2) Subject to the provisions of sub-rule the institution of an appeal, shall not operate to suspend any sentence or to stay execution, but the Court may- (a). (b) in any civil proceedings, where 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 H,ih court or tribunal may ordei nor shall execution_o e_stayedJiy reason only of an appeal having been preferred from the the court1 may upon -good- cause- - -- shown, order stay of execution of suth decree or order where an application is made for stay of execution of an appealable decree or order before the expiration of the time allowed for appealing therefrom, the Court, may upon good caise-shown,order the execution to be stayed. no order for stay of execution shall be made under this rule unless the Court is satisfied- that substantia/Joss may result tQbeprty applying for stay of execution unless the order is made; that the application has been made without unreasonable delay; and that security has been given by the applicant for - - the due performance of such decree or order as may ultimately be binding upon him. [Emphasis added]. Decisions of this Court interpreting Rule 11 are now settled that paragraph (c) of sub rule (2) of this Rule gives the Court discretion to stay of execution upon the applicant seeking a stay upon good cause being shown: Eusto Ntagatinda. vs. Tanzania Fish Process Ltd, Civil - Application No. 8of20-1-1-1-and- eeitaotd Mining Limitedvs; -Twahb AHy, Civil Application No.14 of 2012 (both unreported). In so far as the instant motion isconcerned, the question whether the - ppli aTntapplid for this stay of exeUtibñWithOüt üñiëasonable delay should not be of much concern because the Notice of Appeal was filed on 26th November;, 2014, and fifteen days later on 11th December, 2014, the applicants filed this instant motion. We think, in the special circumstances of this application, the salient question whether the applicants have shown good cause within Rule 11(2) (c) requires our immediate determination. As their good cause, the applicants have firstly submitted that the judgment of the trialcourt it didnot meet the criteria of summary judgments set in Order XX)(V of CPC. Secondly, they complain that the learned trial Judge entered that summary. judgment on the basis of documents which were attached to the plaint. These documents were supposed to be exhibited as evidence and their probity established. This was not done in the context of the summary judgment. Thirdly, in the summary judgment the learned trial judge did delineate role of.the 2' Applicant who was a separate legal ëhtity with no business transaction with the respondent. 12 So-far we have been resistingtheternptationto delve into questions of law touching on the merit or-otherwise of the summary judgment which inéiiblongs to the Court when it later sits on appeal. We can however saythat there is nodipTJte that the respondent concèdëd and the trial court found that there were triable issues and matters arising from documents attached to the plaint which were worth further proof by evidence. The applicants were as a result granted leave to appear and defend thy___ of the impending appeal from the summary judgment, the Court will inevitably consider the fate of undetermined triable issues. We think the applicants have shown a good cause to move the Court - to exercise its discretion to grant a stay of execution. This good cause arises from an important question of law which will inevitably feature when the summary judgment is finally heard by this Court on its merit. That question of law is whether, after the applicants had failed to file their written statement of defence after being granted leave to defend the summary suit, it was proper for the learned trial Judge to enter a summary judgment under Order XXXV of CPC. Or, in light of the acknowledged triable issues arising F have fixed another day for exparte proof in terms of Order VIII Rule 14 (1), 13 -. ---2---b)-in-line-with-procedures in ordinary suits; -The -relevantOrder VIII Rule 14 states: 1 14. -(1) Where any party has been required to present a written statement undersub-rule (1) of rule 1 or a reply under rule 11 of this order and falls to present the same within the time fixed by the court, the court shall pronounce judgment against him or make such order in relation to the suit or counterdaim, as the case may be, as it thinks fit. - (2) In any case in which a defendant who is required under sub-rule (2) of rule 1 to present his written statement of defence fàiTi to do so within the period specified in the summons or, where such period has been extended in accordance with the proviso to that sub-rule, within the period of such extension, the court may- (a)-where the claim is for a liquidated sum not exceeding one thousand shillings, upon proof by affidavit or oral evidence of service of the summons> enterjudgment in favour of the plaintiff without requiring him to prove h/sc/aim; (b)-in any other case, fix a day for ex parte proof and may pronounce judgment in favour of the plaintiff upon such proof of his claim.' [Emphasis added]. In the upshot of the foregoing finding, the execution of the summary judgment and decree of the Commercial Division of the High Court at Dar es F 14 herebystayedpendingdeteim i nation of a ppeal to thiscourt:Eac*party-sha II bear its owncosts. DATED at DAR ES SALAAM this 25th day of March, 2015. N. P. KIMARO JJJSTICEOFAPPEAL •----B-M--L-UANDA JUSTICE OF APPEAL K. M. MUSSA JUSTICE OF APPEAL I certify that this is a true copy of the original. 15