Hydrox Industrial Services Ltd & Another vs CRDB 1996 Ltd & Others (Civil Application No. 87 of 2015) [2018] TZCA 348 (27 December 2018)

IN tHE COURT OF APPEAL OF TANZANIA AT DAR ES SALAAM (CORAM: MWARIJA, l.A •• NDIKA, l.A., And KWARIKO, l.A.) CIVIL APPLICATION' NO. 8i'OF~'20i5. ,.

1. HYDROX INDUSTRIAL SERVICES LTD.
2. DICKSON KASHURA ......•..............•..... APPLICANTS VERSUS
3. CRDS (1996) LTO.
4. ANGELO PASTORY MUTA
5. OLDONYO lENGAI AUCTION MART ....••••.•••••..•.•....••.. RESPONDENTS (Application for stay of execution of the judgment and decree of the High Court of Tanzania at Dar es Salaam) (Muruke, l.l Dated the 17th day of October, 2011 in -Civil Case No. 194 of 1999 RULING OF THE COURT 09 th November & 27 th December, 2018 KWARIKO, l.A.: .• ~~ lA_b.;·."-,.I< ••• ''',; ., .••.••.•... ' 1h'" '_ ',... .' _,#.:... '.,', __ .' .. ,,,-II, .\l-.,..~~,. ..'I,"', •••• "'.)O,~ ••••.• ; •• ;"""" "'1> -"",' .,. .. :-, • ....,.;.,,'.}:.""'4.'...t-;:'''..::,., ..•• ;:,!'' .•• -: .. .....,,_,,'''.:..._''-••...... ..• ,. •.••• "!' The applicants na'-e h"fecrffifs application for stay of execution or the , '~.' decree of the High Court of Tanzania at Dar es Salaam in Civil Case No. 194 of 1999 passed by Muruke,' J." The application is made by way of -notice of motion ir.-r"terms of Rules 4 (2) (b); 11 (2) (b)'(c}{d3 (i) (ii) (iii) 1

and (e) of the Court of Appeal Rules, 2009 (the Rules). The grounds "_',' ~ flanking the notice of motion are as follows:- ""- "(1) The jut1gue/l- and Decree of the High Court of Tanzaniaat Dar es Salaam (Hon. Z G. Muruke/ J) dated 17 h October. 2011 in Civil Case No. 194 of 1999 is problematic and if not stayed the 1 st , Respondentwill sell the I" Applican~s property with Certificate of Title No. 45667 causing substantial and irreparable loss to the Applicants which cennot be atoned by way of damages. (2) There are good and sufficient reasons for staying execution of the aforesaidJudgment and Decree to prevent the ends of justice from being defeated especiallywhen the High Court proceededto uphold 'ReS(!)lution of the I" Applicant .Compeny authorizing , '" creation of the said mortgage in respect of clear that the mortgage deeds where in respect of 2

Certificate of Titte-No. 45657.and not certificate of 0; .•.• Title No. 45667 owned by the 1 st Applicant Company. (3) Stay of Execution of the problematic Judgment and Decree of the High Court of Tanzania at Dar es Salaam (Han. ZG. Muruke/ J) dated 1;th October; 2011 in Civil Case No. 194 of 1999 is necessary not only on the balance of convenience but also to protect the rights and interests of the ,2Jd Applicant who despite being a shareholder and Director of the Company having only two members/ directors was not aware of the Mortgage transaction in favour of the 1 st Respondent (4) The Judgment and Decree of the High Court of Tanzania at Dar es Salaam (Han. ZG. M_lJr,uk~~ 1.) "" ";" 1 •• '.:.": __ ' •.•. ':'"' •.• '.~~ . .; -' ••• ' I .•.. • -_ "':'" __ ." ., '.""""""">' •. -';"''"''''''''' .<1 ••.. '"II.!' ,., ,.f-",-,~ .••...,. .• , . ';<:"' dated 1;th October. 2011 in Civil Case No. 194 of 1999. which is the subject of this application is a direct result and consequence of serious irregularities in analysis of the evidence before the

· , ,High Court and the application of the relevant law governing administration of limited liability compeoies. (5) That the value of property under Certificate of Title No. 45667 which belongs to the 1 st Applicant is higher than the claimed sum and if this Honourable Court orders stay of execution the 1 st Respondent will not suffer any loss as the property will continue to be available as security until the appeal is heard and finally determmed. N The notice of motion is supported by the affidavit sworn' by the 2 nd. applicant, Dickson Kashura who is also the Managing Director of the 1 st applk:ant. The great part of the affidavit has explained chronoloqicalevents regarding the case, Thus, relevant paragraphs for the purposes of this 3. That, the trial courtdelivered the impugned judgment on the' 17th of October, 2011 in Wliich it held inter alia that, the 1 st respondent is entitled to sell the mortgaged property with Certificate of Title No. 45667 to realize the outstanding debt. 4

10. That, upon being aggrieved by the whole" of that decision, the applicants-lodqeda Notice of Appeal on the 27th October, 2011.
11. That, the judgment of the trial court is erroneous and that there are overwhelming chances of successin the intended appeal.
12. That, the value of the property ordered to be sold is higher than the outstanding loan amount; hence for the interest of justice the property should not be disposed of pending determination of the appeal.
13. That, on the balance of convenience, if the 1 st Applicant's property comprised in Certificate of Title No. 45667 is sold the applicants will suffer substantial and irreparable loss which cannot be atoned by way of damages. Further, the property hosts a factory manufacturing chemicals of water treatment and filtration for domestic and industries, under iicense of HYDRO-X A/S in Denmark ,,JJ "," '. ""':, • .:.••• .->.~~"•.,.-,'.-, .• :_ "-i,',' and employs 15 persons, '0\ .-. ;
14. That, the requir-ementfor the provision of security is not relevant in this case 'as' "the 1 st Respondent is' already in possession of the original Certificate of Title No. 45667 belonging to the 1 st Applicant, 5

hence, the Applicant~· cannot dispose it in any way; thus, the 1 st , Respondentis not at any risk. This application 'has 'been opposed by the i st respondent through the affidavit in reply sworn by its advocate Mr. Mpale Kaba Mpoki, learned counsel. Essentially, it has been deponed that the applicants do not stand to suffer anything because they benefited from the loan which the pt respondent advanced to them. And that security for stay of execution is required even when the original Certificate of Title is in the hands of the 1 st respondent. At the hearing of, the application, the 2 nd applicant appeared in person on his own behalf and on behalf of the 1 st applicant as he is its Managing Director. Mr. Mpaie. Mpoki, appeared for the 1 st respondent. The 2 nd and 3 rd respondents, though they could not be found for service, it transpired from the court record that they never participated in the prnccec;r.gs at the, trial court and -t~:",,Q~cit::i0t] was made ex parte against" ".. r- them. Thus, in terms of Rule 63 (2) of the Rules, the Court proceeded with hearing of the application in their absence. Attheoutset the '2flq;'~appiicant prayed for adjournment of hearin{) SO'" " that he could find another advocate contending that, the one who filed the 6

pleadings did not appear and could not trace him. Upon consideration, the Court found that, the applicants were duly served on 11/10/2018 through -- - -their advocate, jvU. - Didace 'Of Didace & Co. Advocates. Hence'ff - "-- -- .. - ,,- anything, the applicants had ample time to find another advocate to argue the application. The Court, as rightly urged by Mr. Mpoki declined the prayer to adjourn the hearing and ordered the 2 nd applicant to proceed personally. Arguing the application, the 2 nd applicant prayed for stay of execution of the decree of the trial court. He was emphatic that, the grounds in support of the application are contained in the notice of motion and the supporting affidavit. However, he submitted that, he has not provided any security for due performance of the decree. In opposinq the application, Mr. Mpoki argued that, Rule 11 (2) {d) of ,before the order of stay of execution is given. He contended that, the appllcants hevenot given Security for due performance ofthe decree being ,j)"",lc",_- ;"one .of those condltions. He. therB.fQ[(!,,_prayed for dlsrnlssal. "of the. - -.>-, ." 7

c, • application with-costs, In his rejoinder, the·2 nd applicant only insisted on his earlier prayer. •.•.•.• ' -·.-"1',,- -.' " .• ~ "-" •.•• ~~ .... •••.•• , "'1-." ,~ •. ,';"'" " .,. ol,....,; .'· __ L ..•• ";1 •••••••.• ,:~~,. ~. , We have dispassionately considered the rival submissions by the parties. The issue that poses for decision is, whether the applicants have fulfilled the requisite conditions under the law, for the grant of stay of execution. Rule 11 (2) (b) (c) and (d) (i) - (iii) of the Rules provides thus; (a) (not applicable) (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 High Court or tribunal may order, nor shall execution of a decree be stayed by reason only of an appeal having been '-, -,' :',. (c) where an application is made for. stay of execution 'of an appealable decree or. order before .. the expiraJiqn of the. tilJJ", q!{owed for"·.,, " 8

appealing.therefrom/ the Court. may. upon good . cause shown order the execution to be stayed.

• ,,,. {dj- no 'order for stay of 'execution 'shall be made under this rule unless the Court is setistied> (i) that substantial loss may result to the party applying for stay of execution unless the order is made; (ii) that the application has been made without unreasonable delayand (iii) that security has been given by the applicant for the due performance of such decree or order as may ultimately be binding upon him, -, '. ,, The,I,(3'A.( says.h?t,. the appII€l.ntf9SJm, orQr,Qf.-?,tqy of e~~l:ItlorL must . __,,; , . - '" ." .-, ' • .\ ','' 'T'" • ': .t'· ,,;, ,'. . ~ "cumulatively satisfy the conditions listed above. This law has been applied "by this Court in its various de<;isjo9§; few of. them are; MANTRAC .. ~ .. ,', ;,' .,." TANZANIA_LIMITED v. RAYM9ND C{)STA; Civil Application no. 11.of/" .... ~~:,~, ".:, •• 'Y. ••• '(.: ,-~,;;,A,,:~~.{. "'.>" . J;,",. 2010, JOSEPH ANTONY SOARES @ GOHA v. HUSSEIN 5/0 OMARY, 9

Civil Application no. 6 of 2012 I HAl DISTRICT COUNCIL & t\NOTHER . v, KILEMPU KINOKA lAIZER & 15 OTHERS Civil Application No. 10/05 of 2017 ANTOrYc NGOO'''&- ANOTHER'v. KITINDA KIfviARO Civii Application No. 12 of 2012 and MOHAMED RAJUU HASSAN v, AlMAHRI MOHSENGHAlED & 2 OTHERS, Civil Application No. 570/17 of 2017 (all unreported). The question arising here is whether the applicants have satisfied the conditions provided by the law. Firstly, the impugned judgment was given on 17/10/2011 and the notice of appeal was lodged on 27/10/2011 within thirty (30) days as required under Rule 83 of the Rules. This application was filed on 28/4/2015, after extension of time vide Civil Application No. 182 of 2012 of this Court. Therefore, the application was filed timely. Secondly, the Court is satisfied that the applicants will suffer , • ' ••• - . • J'" I • have shown that, the property adjudged to, be sold hosts a chemical . manufacturlnq factorv which employs about 15 people, .v. -'- 10

Thirdly, the Court has considered whether the applicants have -... , furnished security for due performance of the decree. In this respect the 1 st applicant deponed inhis affidavit'that~"provisr()ff()f'secarity"is' not relevant:":": .. · here because the original Certificate of Title No. 45667 in respect of the property ordered to be sold, which belongs to the 1 st applicant, is in the custody of the 1 st respondent. This Court agrees with the 1 st respondent that, even if the original title deed of the said property is in its hands, the applicants ought to furnish' other form of security to ensure that, the respondents would not be deprived the fruits of the decree in the event the appeal ends in disfavour of the applicants. Also, the impugned decree says that the mortgaged propertywith Certificate of Title No. 45667 should be sold by the 1 st respondent to realize the outstanding debt. That means that, the property cannot be -securitv for the applicants because it is the subject of the decretal order; Hence the property is no longer in the hands performance of the decree- See the principle as stat€ci by this Court for . -'. " .. ' ..• . ,.', example in tD.e_·?es of REHEMA EMANUEL & ANQrl.:(i;_. v. ALOIS .". j'.,. BONIFACE, Civil Application No.5 of 2015 and MOHAMED SAID SElF s 11

ANOTHER v .. AB9ULAZIZ HAGEB, Civil Application No. 9--0f,,-2016 (both: unreported) .. _ •...•.. : .•.. .." •• \ .•••••••••••••• ... .._ •••• "., -. "';; • .>; •• It is therefore clear that, the applicants have failed to furnish security for the due performance of the decree; they have not cumulatively satisfied the conditions for the grant of the order of stay of execution of the d-ecree. As a result, this application -is· devoid of merit and it is hereby dismissed with costs. It is so ordered. DATED at DAR ES SALAAM this 19 th day of December, 2018. A. G. MWARIJA JUSTICE OF APPEAL G. A. M. NDlKA JUSTICE OF APPEAL M. A. KWARIKO JUSTICE OF APPEAL APj:,~~. .. L s IS a true copy of the oriqinal. ~ .-. '''' ••• ..,......•. ·t· ••.••.•• ·-· •..•. r. ! 0 ,i.:. •. ' ,,0> .•.•.••••••••. ··'"l:'--·-·.-·.~·,,·t·'-V·-· ,,', •• •• , -".' ~ >""-"''('';'''~~' ,, (J, b:.' \ w\ '-?... )I! i:~ . ':c.' "7' ,'"l , I J < , .. • 1/.;, I;' .,,~ \ .' , .. '.: /A " , : I '\ " ", .'~ , F F F "', ,... "-"}' ~~.- ..t. '" _ •• ,', .r- ~)':" "''-..,)f. >1". .. DEPUTY RE COURT OF .,' .-;, •••..••••• ..( '" orS"" 1 ••• 'I:I'!" •• :- •••••• ~ •• 01!": ',. ~" ' •..••.. ,' \ ::. :.:.,;, :,..',.'.: .. •. , -,?T;;-: •. "' • ......, . •• ' " r.· ...... , " .••• - _ ••• ..,. of;o" 12