IN THE COURT OF APPEAL OF TANZANIA

AT PAR ES SALAAM

( CORAM: MUSSA. J.A.. MMILLA. 3.A. And MKUYE, J.A.^

CIVIL APPLICATION NO. 103 /01 OF 2017

CRDB BANK LIMITED............................................................... APPLICANT

VERSUS
1. ISSACK B. MWAMASIKA
2. REGISTERED TRUSTEES OF DAR ES SALAAM
INTERNATIONAL SCHOOL TRUST FUND f T ............. RESPONDENTS
3. EDBP & GD CONSTRUCTION CO. LTD j

(Appeal from the Judgment and Decree of the High Court of Tanzania
at Dar es Salaam)

(Mkasimonqwa.
dated the 19th day of January, 2017
in
Civil Case No. 79 of 2012

RULING OF THE COURT

3rd & 19thJuly, 2017

MUSSA, 3.A.:

In the High Court of Tanzania, at Dar es Salaam, the respondents

herein sued the applicant, a banking institution, on a variety of claims arising

from a contract of redemption of mortgages, discharge of hypothecation of

a goods bond, as well as the torts of detinue and negligence. At the

conclusion of the trial, on the 19th January 2017, judgment was entered for

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the respondents (Mkasimongwa, J.) who were awarded the following

reliefs:-

1. USD 30,000,000/= being loss of business

opportunity opportioned as follows:
a. Loss by the 1st plaintiff USD 21,000,000/= being
70% o f USD 30,000,000/=.
b. Loss by the 2ndplaintiff o f USD 3,000,000/= being
10% o f USD 30,000,000.
c. Loss by the J dplaintiff of USD 6,000,000/= being
20% o f USD 30,000,000.
2. Interest o f 7% rate per annum of each portion
from when this matter was instituted in court to
the date o fjudgment.
3. Interest at the court rate o f 7% per annum on
Tanzania Shillings equivalent to each portion from
the date o f judgment to the date o f final
settlement.
4. Payment o f USD 186,244 to the J dplaintiff being
the fees / charged paid for the preparation o f the
feasibility study (Exhibit P15).
5. Payment o f USD 500,000 to each o f the plaintiffs
separately being general damages.
6. Costs.
 Dissatisfied, on the 23rd January, 2017 the applicant requested, by

letter, to be supplied with copies of the impugned proceedings, judgment

and decree just as she, contemporaneously, duly lodged a Notice of Appeal

expressing her intention to challenge the verdict in this Court. A little later,

on the 28th February, 2017 the applicant, filed the matter at hand on a

certificate of urgency, through which she moves the Court for an order of a

stay of the execution of the decree of the High Court pending the hearing

and determination of the intended appeal. As it turns out, the application is

by way of a Notice of Motion which was taken out under the provisions of

Rule 11(2) (b) and (c) of the Tanzania Court of Appeal Rules, 2009 (the

Rules). The same is accompanied by an affidavit of Dr. Charles Stephen

Kimei, who happens to be the Managing Director of the applicant. In

addition, the applicant has filed written submissions to buttress her quest.

As it were, the applicant's affidavital deposition is countered by an

affidavit in reply sworn by Mr. Issack B. Mwamasika, the first respondent

who is also the chairman of the second respondent and the Managing

Director of the third respondent. It is noteworthy that the respondents have

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just as well enjoined joint written submissions into which they, inter alia,

express

"The Respondents herein do not oppose the grant of

an order o f stay o f execution of the decree o f the
High Court o f Tanzania (Dar es salaam District
Registry) at Dar es Salaam (Hon. Mkasimongwa, J.)
dated I9 hJanuary, 2017 in Civil Case No. 79 o f 2012
if it is made conditional upon the applicant
depositing in this Hon. Court a Bank Guarantee
covering the entire decretal amount within
two (2) weeks o f the delivery o f this Court's
ruling."

When the application was placed before us for hearing, the applicant

had the services of two learned counsel, namely, Mr. Richard Rweyongeza

and Dr. Alex Nguluma. On the adversary side, the respondents were

represented by three learned Advocates, namely, Professor Gamaliel

Mgongo Fimbo, Mr. Mpaya Kamara and Mr. Martin Matunda.

At the outset, Dr. Nguluma rose to request for an adjournment so as

to enable the applicant to seek leave and file a supplementary affidavit to

counter paragraph 7(e) of the affidavit in reply of the first respondent

wherein the latter deponed

"That, in addition to the credible reputation o f the

Bank (other than the Applicant) which shall issue
such Bank guarantee, the guaranting Bank should
also have the financial wherewithal to meet the
amount involved in the decree."

Dr. Nguluma reminded us the applicant actually expressed her desire

in paragraph 2.8 of her written submissions in the following words:-

"In light (sic) o f Rule 106 (2) (b) of the Court of

Appeal Rules, the Applicant would wish to apply for

leave to introduce documentary evidence not

attached to the affidavit in support of the Notice of

Motion with a view to show the relative financial

strength o f commercial banks and the reasoning why

the Applicant should be allowed to issue the bank

Guarantee for payment o f the decreetal amounts."

 Thus, on the strength of the submission, the learned counsel for the

applicant prayed for an adjournment, as already intimated, so as to seek

leave to apply for leave to introduce the document which he claimed that

has just been obtained from the Bank of Tanzania.

In response, the respondents strenuously resisted the prayer in a

submission that was presented by Mr. Kamara on behalf of his colleagues.

In the main, the learned counsel for the respondents argued that the prayer

for an adjournment flies in the face of the certificate of urgency which was,

actually, the reason behind expediting the hearing of this matter.

Furthermore, he said, the applicant did not act urgently and diligently in

prosecuting her desire to introduce a supplementary affidavit. If anything,

counsel urged, the quest for introduction of a supplementary affidavit ought

to have been made well before the application was scheduled for hearing to

enable the court to remove the same from the cause list and replace it with

another deserving cause. Looked from that angle, Mr. Kamara concluded,

the prayer for an adjournment borders on an abuse of the Court process of

which, if granted, will set a very bad precedent of putting the business of

the Court in hold to allow a party to fetch additional evidence.

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 In his address, Mr. Kamara also informed the Court that upon

gleaning, from her submissions, the applicant's desire to seek leave to

introduce new evidence, on the 20th June, 2017 the respondents wrote her

requesting to be furnished with the particulars of the intended additional

evidence. In response, on the 30th June, 2017 the applicant furnished them

with a document titled "ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31st DECEMBER, 2016." Mr. Kamara wound up his

address with a suggestion that, to avoid an unnecessary adjournment, they

will not press for an objection if the applicant desired to have the document

put on record at this stage. In fact, in a rejoinder, Dr. Nguluma picked the

cue to make a request, and we allowed him to put the document upon record

under Rule 4(2) (a) and (b) of the Rules. Not insignificantly, Dr. Nguluma

neither sought the Court's nor the respondents' indulgence to introduce any

other document apart from the report under reference.

And finally, to buttress the foregoing submissions of his colleague,

Professor Fimbo rose to interject a rider to the effect that if the applicant

was diligent in prosecuting her wish to introduce new evidence, she ought

to have initiated her quest immediately after receipt of the first respondent's

affidavit in reply on the 28th March, 2017 and, in any event, before the
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application was cause listed for hearing. With this detail, so much for counsel

submissions on the applicants prayer for an adjournment.

Having heard counsel from either side, we were agreed that the

applicant has not assigned good cause in her prayer for an adjournment and

we, accordingly, declined the request and ordered the hearing of the

application to proceed. We, however, reserved the reasons for our refusal

which we now briefly give.

For purposes of clarity, we propose to preface our reasons with a

proposition that where, as here, the Court is called upon to adjourn an

application, the instructive provisions are comprised in Rule 59 of the Rules

which stipulates:-

"The Court may, upon good cause shown, adjourn

the hearing o f an application upon such terms and

conditions as to costs as it may think f it "

[Emphasis supplied.]

To cull from the extracted provision, an adjournment does not avail to

a party as a matter of course; rather, it may only be granted upon the

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showing of good cause by the party praying for an adjournment. What is

more, from the wording of the provision, it is entirely upon the discretion of

the Court to either grant or refuse a prayer for an adjournment, regard being

had to the showing of good cause. The expression "good cause" is not

defined by the Rules but, we should suppose, the same denotes adequate

or substantial grounds or reasons to take action, or to fail to take any action

prescribed by a due process. Thus, where, for instance, a cause is scheduled

for hearing, as is the situation at hand, the burden is placed in the party

seeking an adjournment to show adequate or substantial grounds to deserve

a Court order departing from the prescribed schedule.

Again, we should suppose, such adequate or substantial grounds

would not include a conduct constituting negligence, apathy or inadequacy

on the part of the party seeking an adjournment. That is to say, for one to

deserve an adjournment upon good cause, the desirous party must show

that he/she diligently braced himself/herself towards a hearing and the

disability to proceed was not a result of his/her sloppiness; rather, it resulted

from an intervening event to which he/she was not blameworthy. We should

caution though, that what constitutes good cause in the exercise of the

Court's discretion to grant or refuse an adjournment varies from case to case

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depending on the particular circumstances of any given case. In any event,

the overriding consideration is that a grant or refusal should not work to the

prejudice of either party in the cause.

All said, we were not, in the least, persuaded that the applicant acted

diligently in the prosecution of her desire to introduce additional evidence by

way of a supplementary affidavit. The applicant claims that the desire was

prompted by the 1st respondent's affidavit in reply but, to be sure, the

affidavit in reply was served on the applicant on the 28th March 2017 which

was well ahead of the Notice of Hearing which, as it turns out, was placed

at the applicant's door much later on the 10th may, 2017. To say the least,

upon being served with the first respondent's affidavit in reply, the applicant

dawdled along a good deal and did nothing up until when she came with the

request for an adjournment at the scheduled hearing. As was correctly

formulated by Mr. Kamara, the applicant ought to have initiated her quest

for leave earlier so as, if need be, to enable the Court to remove the

application from the cause list and replace it with a more deserving matter.

On the whole, we are equally satisfied that, in the matter under our

consideration, the refusal to grant the adjournment would not work to the

prejudice of either party, the more so as, after all, the applicant was allowed
to introduce the report. So much for the reasons behind our refusal to grant

an adjournment.

Coming now to the application, given the respondents' partial

concession, the issue of contention narrows down to the adequacy of the

security which the applicant has undertaken to furnish. In this regard,

counsel from either side fully adopted their respective written submission

which they buttressed with brief explanatory oral submissions from,

respectively, Dr. Nguluma, on the one hand, and Professor Fimbo and Mr.

Kamara, on the other hand.

In her submissions, the applicant contends that on, a true reflection,

the decretal amounts are colossal and, if collected, the business operations

of the applicant are bound to be seriously affected. But the applicant further

contends that she is a well established banking institution and, in the

premises, she is ready and willing to furnish her own bank guarantee as

security for the due performance of the decree. To justify the so-called own

bank guarantee nature of security, the applicant advanced the following

claims in her written submissions:-

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 "... a requirement that the bank guarantee be given

by a bank other that the Applicant may prove very

difficult and or unpractical to meet the condition>as

the decretal amount is collosal, to find a bank with

adequacy o f assets to issue a befitting guarantee..."

In his oral submissions, Dr. Nguluma insistently replicated the claim

that it will prove very difficult, if at all possible, to find in Tanzania a bank,

other than the applicant, that will have the assets to issue a bank guarantee

of the magnitude to cover the decretal amounts. Accordingly, it was his

prayer that the application be granted with an order for the applicant to

furnish a self-bank guarantee for the due performance of the decree.

In response, the respondents have vigorously resisted the applicant's

suggestion of a self-bank guarantee in both their written submission and the

oral speeches of Professor Fimbo and Mr. Kamara. The respondents went

to painstaking length to explore the meaning of a guarantee with quotes

from Black's Law Dictionary, Stroud's Judicial Dictionary and a treatise titled

"Sheldon's Practice and Law of Banking". In a nutshell, to them, a bank

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guarantee to secure the due performance of a decree is a tripartite collateral

undertaking which involves three parties, namely, the guaranteeing bank,

the decree - holder and the judgment - debtor. As regards the self-bank

guarantee offered by the applicant, the respondents, inter alia, rejoined

"The bilateral nature o f the guarantee offered by the

Applicant necessarily extirpates and completely

removes the distinction between the surety and the

judgment debtor. This conflation o f the surety and

debtor leaves the performance of the decree entirely

at the mercy of the judgment -debtor -cum-

surerity."

To fortify their position on what constitutes an adequate bank

guarantee the respondents referred to us two persuasive decisions - viz -

Rosengrens Limited Vs Safe Deposit Centres Limite'd [1984] 3 ALL

ER 198 and; Firoze Nurali Hirji Vs Housing Finance Company of

Kenya Limited & Another [2012] e KLR. As regards the applicant's claim

on the difficulties or impracticality of securing a third party bank guarantor,

Mr. Kamara contended that the applicant did not proffer any explanation on

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the nature of the so-called difficulties so as to substantiate the claim. On

the contrary, the learned counsel for the respondents went further and

referred to the NMB Bank's financial position as at 31st December, 2016

which, he said, has sufficient equity to issue a bank guarantee of the

magnitude of the decretal sum. Thus, in sum, Mr. Kamara urged that for

the sake of a balanced weighing of the interests of the parties in this matter,

the applicant should be required to furnish a guarantee from a reputable

bank or a syndicate of reputable banks other than the applicant as security

for the due performance of the decree.

Having read and heard the submissions from either side and, as we

have already intimated, the issue of contention narrowly boils down to the

adequency to the self- bank guarantee which is being offered by the

applicant. Ahead of confronting the issue, we wish to generally remark on

the cornerstone of the requirement of furnishing security under Rule 11 of

the Rules. To begin with and, as has previously been held, to meet this

requirement, the law does not strictly demand that the said security must be

prior to the grant of the stay order. A firm undertaking by the applicant to

provide security might prove sufficient to move the Court to grant a stay

order, provided the Court sets a reasonable time limit within which the
applicant should give security (See the unreported Civil Application No. 11

of 2010 - Mantrac Tanzania Ltd Vs Raymond Costa).

Security may be furnished in a variety of ways, the most common being

paying money into court or providing a bank guarantee. Generally, in

determining the issue of a stay of execution as well as furnishing security, in

particular, the overriding duty of the Court is to balance the interests of the

parties. That is to say, where, say, the applicant intends to exercise his/her

undoubted right of appeal and, in the event he/ she was to eventually

succeed the applicant should not be faced with a situation in which he/she

is unable to get back his /her money. Likewise, the respondent who has a

decree in his favour should not, if the applicant was eventually unsuccessful

in the intended appeal, find it difficult or impossible to realize the fruits of

the decree. It is, thus, the duty of the Court to hold the ring even-handedly

preserving the interests of either party (see (supra) Rosengrens Limited

Vs Safe Deposits Centres Limited).

In the matter under our consideration the burning issue is whether or

not the self-bank guarantee offered by the applicant would adequately

balance the interests of the parties from either side. Whilst the applicant

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answers the issue affirmatively the respondents argue that the offered

security flies on the face of the very essence of a bank guarantee itself. As

to what entails a bank guarantee, the respondents have referred to a variety

of law dictionaries but, to us, simply stated, a bank guarantee is an

undertaking from a bank or landing institution ensuring to meet the liabilities

of a debtor in the event the latter fails to settle a debt.

That being so, we should express at once that it is, indeed,

unprecedented and a novelty for the judgment-debtor to just as well wear

the shoes of a guarantor and undertake to be answerable for the payment

of an own debt. We have already indicated the extent to which, in

determining the suitability or adequacy of the security in the context of an

application for stay of the execution, a court is enjoined to take a balanced

consideration of the rights of the parties, on either side of the litigation. We

are afraid to say that a guarantee by the judgment debtor may have the

result of hazardously leaving the decree-holder unsecure against the

possibility of failing to realize the fruits of the decree. Granted that the

applicant is a renown bank institution with undoubted ability to settle the

decretal amount but, with passage of time one cannot overrule the possibility

of its wherewithalness being wiped out by an unpredictable financial turmoil.

That said, to us, when it comes to protecting the interests of a decree holder,

it will require the undertaking of a third guarantor to secure the performance

of a decree.

Unfortunately there is a dearth of authorities on the specific issue of

contention but, perhaps, close to the issue in the Kenya High Court decision

in Firoze Nurali Hirji (supra). In that case, the respondent urged the court

not to allow one of the applicants to furnish a bank guarantee of its own as

security for the due performance of a decree. The Court clearly expressed

that it had not gleaned any suggestion to that effect from the applicants but,

to avert the fear, the court nevertheless held:-

"Taking all relevant factors into account and in order

not to render the intended appeal illusory the

interests o f the successfulplaintiffbut not necessarily

making the stay illusory, I grant a stay of execution

o f the decree herein on condition that the defendants

secures unconditional Bank Guarantee in the Sum of

Kshs. Thirty million only (Kshs. 30,000,000.00) with

 a reputable Bank other than the 1st defendant

within forty five (45) days".

[Emphasis supplied].

To this end, on a parity of the reasoning we are disinclined to accept

the applicant's offer of its own bank guarantee. On the contrary, as we shall

clearly express at the foot of our Ruling, the bank guarantee should be

availed from a reputable bank or syndicate of banks other than the applicant.

In the meantime, the next issue pertains to the decretal sum to be

guaranteed. In this regard, the parties disagree as, whereas the applicant

sugests puts the decretal amount in the sum of USD 30,686,244.00 "... plus

interest and penalties..." the respondent claims that the same amounts to

USD 49,167,504.17 inclusive costs and a monthly interest of

Tshs.540,600/=. The parties disagreement need to detain us unnecessarily

since the reliefs are clearly spelt out in items 1 to 6 of the decree.

Nonetheless, items 2 and 6 are, to us, presently unquantifiable and,

accordingly, the presently total standing figure is USD 42,997,298.00.

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 In the final result, this application partly succeeds in that the execution

of the High Court decree should be stayed pending the determination of the

applicant's appeal to this Court. The order of stay is, however, conditional

upon the applicant depositing a bank guarantee from a reputable bank or

syndicate of reputable banks, other than the applicant in a convertible

sum equivalent to USD 42,997,298.00 within twenty one (21) days from the

date of the delivery of this Ruling. Order accordingly.

DATED at DAR ES SALAAM this 14th day of July, 2017.

K.M. MUSSA
JUSTICE OF APPEAL

B.M.K. MMILLA
JUSTICE OF APPEAL

R.K. MKUYE
JUSTICE OF APPEAL

I certify that this is a true copy of the original.

DEPUTY REGISTRAR
COURT OF APPEAL

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