Stay of execution of the decree of a court—28

This week a new hashtag #TheCitizenIsBack has been trending in Tanzania and it’s for all the right reasons. Indeed, we are thrilled to be back on this page! Now, let’s get to business.

On Saturday 23 February 2019, in the twenty-seventh part of our 30-part article series on secured transactions, corporate recovery and insolvency and banking litigation, we discussed the option of objecting the attachment of property in execution of the decree issued upon the judgment of a court.

Today, in this twenty-eighth part of the series, we briefly scan the concept of, and the factors which the court will consider in granting or refusing an application for, a stay of execution of the decree. Reference is made to relevant judicial authorities in Tanzania, where need arises.

So, what is a stay of execution?

A stay of execution is a momentary suspension of a court order (encompassing rights declared in favour of the judgment creditor/decree holder) from being carried out.

Order XXI Rules 24-27 and Order XXXIX Rule 5 are the provisions in the Tanzanian Civil Procedure Code, Cap 33, which may be typically invoked by banking business customers who become judgment debtors when seeking stay of execution.

A stay of execution has no air of finality about it. It only prevents a decree holder from taking steps to enforce or execute a judgment and decree obtained in its favour.

Stays are useful where, for instance, the judgment debtor intends to or has taken further legal action, such as an appeal to the higher court. But the appeal does not operate as a stay of execution.

If no appeal is filed but there is the intention to do so, the intended application for stay of execution should be made to the court that issued the decree. Once the appeal process has commenced, the application for stay should be made to the appellant court which only can stay execution.

When is an appeal deemed to have been commenced? With regards to a stay of execution, an appeal is deemed to have been commenced in the Court of Appeal of Tanzania (“the CAT”) when the notice of appeal is filed in the CAT (see, Aero Helicopter (T) Ltd v. F.N. Jansen [1990] TLR 142).

But here is a question to ponder: Where ‘leave to appeal’ is a prerequisite and it has not has not been obtained, can stay of execution be granted?

An application for stay of execution must conform to the format as by law prescribed and must be made without unreasonable delay. What time may be considered as being reasonable will depend on the circumstances of a given case.

In its ruling in the case of Loswaki Village Council and Another v. Shibesh Abebe [2000] TLR 204, the CAT said that “in a very simple case, a period of one to two months would be reasonable”.

There are general rules or guiding principles which must be satisfied before the court can grant a stay of execution. The principles, as espoused by the CAT in the case of Tanzania Electric Supply Company (Tanesco) v. Independent Power Tanzania Ltd (IPTL) and Two Others [2000] TLR 324, are: whether the appeal has a prima facie likelihood of success; whether its refusal is likely to cause substantial and irreparable injury to the applicant; and balance of convenience.

The grant or refusal of a stay is an exercise of the court’s discretion. In determining whether the applicant has made a case meriting the exercise of the discretion in favour of granting the stay, the court will examine the facts disclosed in the affidavit supporting the application.

Although the grant or refusal of a stay of execution is at the discretion of the court, the court must consider the general rules or guiding principles highlighted above in arriving at a decision.

Ultimately, a clear understanding of the law and procedure applicable to the concept of stay of execution is necessary, so as to convince the court to decide in a party’s favour.

The exercise of the court’s discretion notwithstanding, the duty of the court remains to do justice according to the law.

Paul Kibuuka ([email protected]) is a tax and corporate lawyer, tax policy analyst and the chief executive of Isidora & Company.