Mwanga Hakika Microfinance Bank Limited vs Hamza B. Byarushengo (Civil Application No. 99/17 of 2024) [2024] TZCA 951 (27 September 2024)

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM CIVIL APPLICATION NO. 99/17 OF 2024 MWANGA HAKIKA MICROFINANCE BANK LIMITED....................APPLICANT VERSUS HAMZA B. BYARUSHENGO ........... .................................... RESPONDENT (Application for stay of execution of the decree of the High Court of Tanzania at Dar es Salaam) fMonaella. 3.^ dated the 17th day of July, 2023 in Civil Case No. 45 of 2019 RULING 17th & 27th September, 2024 ISSA. 3.A.: The respondent sued the applicant at the High Court of Tanzania at Dar es Salaam (the trial court) for wrongful withholding of his residential licence No. KND024074 in respect of a house located at Msewe, Ubungo in Dar es Salaam Region, which he pledged as a security for a loan which was granted by the applicant in 2013. The respondent repaid the loan, but the applicant refused to release the licence which compelled the respondent to file Civil Case No. 45 of 2019. The case ended in respondent's favour and the applicant was ordered to

pay general damages amounting to TZS. 50,000,000.00, interest at the rate of 15% per annum and the costs of the suit. Aggrieved, the applicant lodged a notice of appeal to challenge the decree of the trial court. The respondent, on the other hand, lodged Execution Application No. 5053 of 2024, seeking to enforce the decree challenged. The respondent is claiming TZS. 75,795,515. TZS. 50,000,000 is the general damages awarded by the trial court, TZS. 3,750,000 is the 15% interest and TZS. 22,045,515 is the costs awarded in Bill of Costs No. 159 of 2023. In response, by a Notice of Motion filed under rule 11(3), 11(4), 11(4A), ll(5)(a),(b), 11(6), 11(7) (a),(b),(c),(d) and 48(1) of the of the Tanzania Court of Appeal Rules, 2009 (the Rules) the applicant had sought to move this Court to order a stay of execution pending hearing and determination of the intended appeal. The application is supported by an affidavit sworn by Nancy Kissanga, the company secretary of the applicant company. When the application was placed before me for hearing, the applicant had the services of Mr. Cleophace James, learned advocate. The respondent was represented by Mr. Ashiru Lugwisa, also learned advocate.

Mr. James adopted the affidavit and a written submission filed earlier on. He submitted that the applicant has complied with rule 11 of the Rules. The decision of the trial court was delivered on 24th July, 2023 and the applicant lodged the notice of appeal on 31st July, 2023. Further, the applicant was served with the notice of execution on 4th March, 2014 and she filed the instant application on 5th March, 2014 within 14 days as required by rule 11(4) of the Rules. Furthermore, Mr. James argued that the applicant will suffer substantial loss if execution is not stayed as the respondent intends to execute the amount beyond what was decreed and he intended to attach the motor vehicles which are not the applicant's properties. They are vehicles which have been pledged as security by different customers. In addition, he said that the applicant is willing to furnish security for the due performance of the decree. He prayed for the application to be granted. Although the respondent did not file an affidavit in reply, he filed a written submissions which he readily adopted. At the outset, Mr. Lugwisa outlined his position to oppose the application. He submitted that for stay of execution to be granted the applicant must cumulatively satisfy all conditions under rule 11 of the Rules. To support this argument he relied on the Court's decision in Ongujo Wakibara Nyamarwa v. Beatrice Greyson Mmhaga, Civil Application No.

200/17 of 2021 [2022] T7CA 732 (21 November 2022, TANZLII). He added that, in the present application, the applicant has failed to prove substantial loss. Paragraph 8 of the affidavit failed to substantiate the point. He bolstered his argument by citing the Court's decision in Tanzania Cotton Marketing Board v. Cogecot Cotton Co. SA [1997] T.L.R. 63 which held that the applicant was duty bound to substantiate the substantial loss. Mr. Lugwisa added that the applicant in his written submission which is argument from the bar contends that the respondent intended to attach the applicant's vehicles, but this statement did not feature anywhere in the the applicant's affidavit. He buttressed the point by citing the Court's decision in Tina and Company Limited and Others v. Eurafican Bank Tanzania Limited, Civil Application No. 86 of 2005 [2016] TZCA 744 (29 January 2016, TANZLII). Lastly, he submitted that the conditions for granting stay of execution have not been satisfied, hence, he prayed for the application to be dismissed. In the alternative, in case the stay is granted he prayed for the applicant to be ordered to make a cash deposit of TZS. 50 million. In the rejoinder, Mr. James pointed out that substantial loss has been explained in paragraph 8 of the affidavit and also in Annex. MAB 5. The respondent has claimed TZS 75,000,000 which is more than the

decreed amount which stood at TZS 50,000,000. On the issue of cash deposit, Mr. James argued that there is no law which required the applicant to make a cash deposit. He submitted that the applicant is ready to abide by paragraph 10 of the affidavit. He reiterated his earlier prayer. In the instant application, the Court has been called to determine the grant of stay of execution in general and there are two issues in contention. One, whether substantial loss has been established, and two, the kind of security that should be provided for due performance of the decree that ultimately will become binding on the applicant. At this juncture, I find it opportune to state the law with respect to the application for stay of execution. Rule 11 of the Rules deals specifically with the stay of execution and the applicant is required to comply with sub-rule (3), (4), (5) and (7). Rule 11(3) of the Rules provides: (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 nor shall execution o f a decree be stayed by reason only o f an appeal having been preferred from the decree or order; but the Single Justice

may upon good cause shown, order stay execution o f such decree or order" The Court in numerous decisions has held that, for it to exercise its powers under rule 11 (3) there must be a valid notice of appeal which clothes the Court with jurisdiction to entertain the application. Further, rule 11(7) also provides that in the application for stay the application must be accompanied by a notice of appeal, a decree or order appealed from, a judgment or ruling appealed from, and a notice of the intended execution. In the absence of a valid notice of appeal and the decree or order sought to be appealed against, the application becomes incompetent and liable to be struck out. (See - Awinia Mushi v. Tropical Pesticides Research Institute, Civil Application No. 2 of 2006 and National Housing Corporation v. Ettienes Hotel, Civil Application No. 175 of 2004 (both unreported). In the instant application, the applicant has complied with the above sub-rules. The application was accompanied by a notice of appeal, a decree, a judgment appealed from and a notice of the intended execution. Further, the notice of intended execution was served on the applicant on 4th March, 2024 and the instant application was filed immediately on 5th March, 2024 within 14 days as required by rule 11(4) of the Rules. 6

Lastly, the applicant was required to comply with rule 11(5) which provides: "No order for stay o f execution shall be made under this rule unless the Courtis 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 o f such decree or order as may ultimately be binding upon him . " In Joseph Antony Soares @ Goha v. Hussein Omary, Civil Application No. 6 of 2012 [2013] TZCA 328 (8 May 2013, TANZLII) and Mantrac Tanzania Limited v. Raymond Costa, Civil Application No. 11 of 2010 (unreported) the Court has stressed that these conditions must be complied with cumulatively. In the present application, the applicant has demonstrated that it stands to suffer substantial loss if the order for stay of execution will not be granted because the respondent intends to attach and sell the motor vehicles belonging to different people which have been pledged as security for the loan granted to those people. There is no doubt that these properties do not belong to the applicant and the applicant is, therefore, entitled to ask for the execution to be stayed. Mr. Lugwisa, on

the other hand, argued that this is a submission from the bar as the applicant did not stipulate this fact in the affidavit supporting the application. Paragraph 8 of the affidavit supporting the application provides: "That the applicant is likely to suffer substantial loss should execution not be stayed given the fact that in his application for execution, the respondent went beyond what was awarded in the decree and incorporated the claim which is not in the decree on the one hand, as he included bill o f costs which is subject to reference before Hon. Maghimbi J. and further that, if execution is not stayed, the applicant's operation shall severely be disrupted or end up collapsing entirely", It is true that this paragraph did not have those details suggesting that the respondent will attach and sell the motor vehicles belonged to the applicant's customers, but one of the attachment in the instant application was the application for execution which was attached as annex. MAB 5. This annexure supported the applicant's argument The respondent listed 14 numbers of motor vehicles and motorcycles intended to be attached and sold to satisfy the decree. Therefore, the argument that it is a statement from the bar does not carry weight and

is dismissed. The Court finds the applicant has been able to prove substantial loss. Lastly, on the issue of security for due performance of the decree which will ultimately be binding on the applicant, the applicant on paragraph 10 of the affidavit undertook to furnish security for the performance of the decree as may be ordered by the Court. Mr. Lugwisa, on the other hand, asked for a cash deposit of TZS. 50 million. To resolve this issue, one ought to look at the purpose of keeping security before the grant of stay of execution. The purpose of keeping security is to safe guard the rights of both the applicant and respondent. It is not to punish the applicant by making life harder for him, but it is to ensure that the decree will be wholly satisfied after the determination of the intended appeal. Using the words of the Court of Appeal of Kenya in Nduhiu Gitahi v. Warugongo [1988] K.L.R. 621 cited and adopted in Africhick Hatches Ltd v. CRDB Bank Pic, Civil Application No. 98 of 2016 [2019] TZCA 148 (15 March 2019, TANZLII). The Court of Appeal of Kenya stated: "The aim o f the Court in this case was to make sure, in an even-handed manner , ■ that the appeal will not be prejudiced and that the decretal sum would be available if required. The respondent is

not entitled, for instance, to make life difficult for the applicant, so as to tempt him into settling the appeal. Nor will either party lose if the sum is actually paid with interest at Court rates." In fine, the order of stay of execution is granted on the condition that the applicant should provide a bank guarantee constituting the decretal sum which is TZS 50,000,000.00. The guarantee should come from another bank and that, the same be furnished to the Court within 60 days from the date hereof. Costs to be in the cause. DATED at DAR ES SALAAM this 26th day of September, 2024. The Ruling delivered this 27th day of September, 2024 in the presence of Mr. Cleophace James, learned counsel for the Applicant and Mr. Ashiru Lugwisa, learned counsel for the Respondent, is hereby certified as a true copy of the original. A. A. ISSA JUSTICE OF APPEAL 10