Tanzania Posts & Telecommunications Corporation v M/S B S Henrita Supplies 1997 TLR 141 (CA)

TANZANIA POSTS & TELECOMMUNICATIONS CORPORATION v M/S B S HENRITA SUPPLIES 1997 TLR 141 (CA) A

Court Court of Appeal of Tanzania - Dar es Salaam

Judge Lubuva JA B

CIVIL APPLICATION 14 OF 1997

12 May 1997

(An application for stay of execution from the decision of the High Court of Tanzania, Dar es Salaam, Kyando J) 

Flynote

Civil Practice and Procedure - Appeal - Stay of execution pending appeal - When granted

-Headnote

The applicant applied for an order to stay the execution of a judgment granted D against it pending an appeal. The applicant contended that if it were not granted the applicant would suffer great loss and damage as the amount involved was great and would cause its business to come to a standstill. It was contended further that the chances of success on appeal were high. The respondent opposed the application and contended that they were in a sound financial position E and would be able to pay in the event of the appeal going against them. The respondent denied that the prospects on appeal favoured the applicant. 

Held: (i) The fact that the amount of loss and damage the applicant was likely to F sustain if no stay order was granted was not a sufficient reason for the granting of an order: the decretal amount, if paid, was capable of being paid by the respondent. The submission that if a stay order was not granted the applicant, a large public corporation, would suffer such irreparable loss that it was incapable of being being atoned by way of damages, was unacceptable; G (ii) The chances of success of an intended appeal, though a relevant factor in certain situations, could only be meaningfully be assessed later on appeal after hearing arguments from both sides. This was a general principle which was not without exception; (iii) The circumstances of the present case were such that even H though the loss and damage that the applicant was likely to sustain if stay of execution were not granted could be atoned by way of damages, there were still lingering doubts whether a stay was not warranted on account of other factors: the prospects of appeal and the balance of convenience. The Court accordingly decided to exercise its discretionary powers under Rule 9(2)(b) and granted a stay subject to the condition that the applicant deposit the decretal amount in court.

Case Information

A Order accordingly.

Cases referred to:

1. Tanzania Cotton Marketing Board v Cogecot Cotton Co SA [1997] TLR 63

2. Transport Equipment Ltd v Reginald John Nolan Civil Applicaiton No 19 of 1993 (unreported) B

3. Joseph K Mlay v Ahmed Mohamed Civil Application No 39 of 1995 (unreported)

4. Winchester Cigarette Machinery Ltd v Payne and Anor (No 2) Times

Law Reports, 15 December 1993

Mrs Gama for the applicant. 

Maira for the respondent.

[zJDz]Judgment

Lubuva JA:

This is an application for stay of execution. It is filed under Rule 9(2)(b) of the D Court's rules. The applicant is seeking an order from this Court that the execution of the High Court decision in Civil Case No 283 of 1988 dated 4 February 1997 be stayed pending the determination of the intended appeal in respect of which a notice of appeal has been filed. Before the High Court, the respondent in this application had filed a suit against the E applicant, Tanzania Posts and Telecommunications Corporation. The suit was fixed for hearing on 20 May 1994 when the respondent failed to appear in court. As a result, an order was issued granting the respondent leave to prove the suit ex-parte. The applicant filed an application for setting aside the order of 20 May F 1994 for ex-parte proof. On 4 February 1997 the High Court (Kyando, J) held that the applicant had failed to show good cause for the failure to appear before the court on 20 May 1994.  

The application was dismissed. In the same proceedings judgment was entered for the respondent on the basis of the affidavit filed by the G respondent for ex-parte proof. That decision (4 February 1997) is the subject of this application. The application is supported by an affidavit deposed by one M C Ndunguru, a legal officer with the applicant corporation. In the affidavit it is deposed that if stay of H execution is not granted the applicant will suffer great loss and damage as the amount involved is very big which would cause the applicant's business to come to a standstill. Mrs Gama, learned Counsel from the Tanzania Legal Corporation appeared for the applicant. In her submission she urged two points. First that if the execution takes place the applicant would suffer an irreparable loss and damage. As the amount involved is a large sum of money, the business of the applicant would be so A affected that it would be brought to a stand still, she insisted. Secondly, that the intended appeal has great chance of success because, she said, the decision of the High Court of 4 February 1997 raises fundamental legal issues. For these reasons, she urged the Court to exercise its discretionary powers under Rule 9(2)(b) of the Court's Rules, 1979. B Opposing the application, Mr Maira, learned counsel represented the respondent. 

He advanced the following reasons for opposing the application: that there was no merit in the application because, apart from asserting that the amount involved is large and that if execution takes place, the business of the applicant would be C brought to a standstill, otherwise no special circumstances have been advanced for the stay order. He submitted further that his client, the respondent is in sound financial position in which case, in the event the applicant succeeds in the intended appeal, the amount, the subject matter of the decree would be repaid. Thirdly, Mr Maira pressed that the intended appeal has very slim chances of D success. And so, Mr Maira invited the Court to dismiss the application because, in his view, there was no reason why the respondent should be denied of his right to enjoy the fruits of his successful litigation. E I will first deal with the discretionary powers of the Court in matters pertaining to application for stay of execution under Rule 9(2)(b) of the Court's Rules, 1979.  

As rightly submitted by Mr Maira, learned Counsel, in exercising the Court's discretion, such discretion should at all times be exercised judicially. This is in F order to ensure that the ends of justice in each case are attained. In order for this to be achieved, each case must be taken on its merits and circumstances. In the light of this general principle I will next examine the relevant factors for the granting or otherwise of the stay order in the instant case. G In the first place, what is the loss and damage that the applicant is likely to sustain if no stay order is granted. As already indicated, Mrs Gama, learned Counsel for the applicant had urged that because the amount involved is huge, the applicant's H business would be brought to a stand still. With respect, I am unable to accept this as sufficient reason for the granting of a stay of execution. It is elementary that the loss involved should be such as would not be atoned by way of an award of damages. On this, there is an unbroken chain of authorities including decisions of this Court. Very recently, in Tanzania Cotton Marketing Board v Cogecot Cotton Company SA (1) this principle was revisited. 

In this case, I am respectively in agreement with Mr Maira that the decretal amount if paid is capable of being repaid by the respondent. I cannot accept the submission by Mrs Gama that if a stay order is not granted, the applicant, a renowned public corporation would suffer B such irreparable loss that is incapable of being atoned by way of damages. Furthermore, in the instant matter, no sufficient ground has been laid upon which the Court could satisfy itself that in fact, such substantial loss would occur. With respect, mere claim that the applicant's business would be affected is not enough. C I would now consider the other factor, namely, the chances of success of the intended appeal. Mrs Gama has vehemently urged that the intended appeal has overwhelming chances of success. This of course was strongly resisted by Mr D Maira, learned Counsel for the respondent. It is however relevant at this juncture, to reflect that this Court has on numerous occasions taken the view that the chances of success of an intended appeal though a relevant factor in certain situations, it can only meaningfully be assessed later on appeal after hearing arguments from both sides. See Transport Equipment Ltd v Reginald John Nolan E (2); Joseph K Mlay v Ahmed Mohamed (3).  

This, it is common knowledge is but a general principle which in my view, is not without exception. There are situations in which as a matter of exception to the rule and depending on the circumstances of the case, the chances of success can be gauged right away. In this case, one peculiar feature emerges quite clearly from the ruling of the High Court. That is F that, on 4 February 1997, the matter was set for a decision on the application for setting aside the order of 20 May 1994 which granted leave to the respondent to prove the suit ex parte. Having decided on that by rejecting and dismissing the G application the matter did not end there. The learned judge embarked on another exercise ie judgment was entered for the respondent on the basis of the affidavit as ex-parte proof. Ordinarily, with the dismissal of the application for setting aside the order of 20 May 1994, the matter should have been set for another date for ex-parte proof. As it was done, the opportunity for the applicant to appeal against that decision refusing to set aside the order of 20 May 1994 was shuttered by the entry of the ex-parte judgment. 

The propriety of this in my view, may well be a deserving legal point for close examination on appeal. H Lastly, I think it desirable to consider the case within the principle of the balance of convenience. It is all the more so in matters involving the exercise of discretionary powers after considering the various relevant factors. The modern and current trend in this direction is AI demonstrated by the following English case of Wincester Cigarette Machinery Ltd v Payne and Another (No 2) in which it was inter alia stated: `In recent cases it has been said that the practice of the court had moved on from the principle B that the only ground for a stay was the reasonable probability that damages and costs paid would not be repaid if the appeal succeeded. Those cases hold that the approach of the court now was a matter of common sense and a balance of advantage ...' (emphasis supplied) C In the instant case, the circumstances are such that even though the loss and damage that the applicant is likely to sustain if stay of execution is not granted can be atoned by way of damages, still I have lingering doubts in my mind whether a stay order is not warranted on account of other factors.  

These are, as already D pointed out, the prospects of the intended appeal and the balance of convenience. Consequently, having regard to the circumstances of the case, I am convinced that it accords with common sense and a sense of convenience that the discretionary powers of the Court under Rule 9(2)(b) to grant a stay of execution E pending appeal could appropriately be invoked. Accordingly, it is ordered that the execution of the decision of the High Court in Civil Case No 283 of 1988 dated 4 February 1997 be stayed pending the determination of the intended appeal. It is further ordered that the stay order is granted upon the condition that the applicant deposits the decretal amount in court. Costs in the cause. It is so ordered.

1997 TLR p146