Banco Arabe Espanal v Bank Of Uganda (Civil Application 42 of 98) [1998] UGCA 42 (14 September 1998)

Full Case Text

# THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA

# AT KAMPALA

#### HON. LADY JUSTICE A. E. MPAGI-BAHIGEINE, J. A., CORAM: HON. MR. JUSTICE J. P. BERKO, J. A. & HON. LADY JUSTICE C. N. B. KITUMBA, J. A.

### CIVIL APPLICATION NO. 42/98

BANCO DRAABE ESPANAL...................................

# **VERSUS**

BANK OF UGANDA...................................

# RULING OF THE COURT:

This application is brought by way of Notice of Motion under Rules 81, 82 and 86 of this Court in which the applicant is seeking for an order that the respondent's appeal No. 23 of 1998 and the notice of appeal filed in this Court be struck out with costs for lack of competence. The application is supported by the affidavit of Wycliffe Birungi an advocate of M/s. Birungi, Semuyaba, Iga and Company Advocates, counsel for the applicant, deponed to on 19th August 1998. The respondent filed an affidavit deponed to by Mathias Ssekatawa, advocate of M/s. Mugerwa & Matovu Advocates, counsel for the respondent.

The brief back ground to this application, as stated by counsel for the applicant from the bar and contained in the affidavit of Wycliffe Birungi, advocate, are that the applicant filed a suit in the High Court against the respondent claiming USD 1,413,604.70. The High Court ordered the applicant to furnish security for costs in the sum of Uq. Shs. $20,000,000/$ = within 30 days. The money was not availed in time and the suit was dismissed. The applicant applied to court under 0.23 $r$ 2 (2) of the CPR to have the suit reinstated when the money was availed. On the 27th May 1998 Byamugisha J. heard the application and allowed the suit to be reinstated and ordered it to be set down for hearing on merits. The respondent filed Civil Appeal No. 23/98 in this court appealing against the order of the trial Judge, hence the instant application. The grounds are:-

- $"1.$ The appellant has not taken the essential steps set out by law to competently file the appeal, - $\overline{2}$ . The fees payable upon filing the notice of appeal were not paid on time as required by law, - The order upon which the appeal lies was not properly 3. **Extracted**, to wit, it does not bear the date on the day the decision was delivered, - The order upon which the appeal lies is further defective $4.$ since it was not drawn up in accordance with the decision and was not submitted to counsel for the respondent for approval as prescribed by law, and - The appeal lies from the terms of the order referred to above 5. and therefore it forms part of the record of appeal and the defects raised above make the record of appeal defective hence the appeal is incompetent."

The applicant was represented by learned counsel Mr. Justice Semuyaba, of Birungi Semuyaba and Company Advocates and the respondents were represented by learned counsel Mr. Masembe-Kanverezi and Mr. Mathias Ssekatawa both of Mugerwa and Matovu Advocates.

Mr. Semuyaba in his submission which was based mainly on the contents of the affidavit of Birungi urged grounds No.1 and 2 of the application together that the appeal should be struck out because the respondent had not taken the essential steps set down by law to competently file this appeal. According to paragraphs 3, 4 and 5 of the affidavit of Birungi and Annexture "A" thereto, the appeal was filed on $28$ th May 1998 and fees were paid on 2nd June 1998. He submitted that this was contrary to rule 103(1) of the rules of this court which provides:-

"103(1) The fee payable on lodging any document shall be payable at the time when the document is lodged".

He emphatically submitted that the provisions of this rule were mandatory. The fees had to be paid on the day the notice of appeal was filed. As that was not done the notice of appeal was not properly filed and was therefore incompetent. In ground 3 of the application learned counsel for the applicant argued that according to paragraph 6 & 7 of the affidavit of Birungi and Annexture B attached there to, the order was dated 25th June 1998, whereas the decision of the High Court was given on 27th May 1998 and the two dates appeared on the order. Counsel submitted that this was contrary to $0.18$ r. $7(1)$ and $(4)$ of the C. P. R. which provides:-

" $0.18$ r. $7(1)$ A decree shall bear the date of the day on which the judgment was delivered"

and

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sub rule 4 of the same order provides:-

"Any order whether in High Court or in a magistrate's court, which is required to be drawn up shall be prepared and signed in like manner".

Counsel submitted that by reason of the order bearing two different dates it had not been properly drawn and was therefore defective.

In ground No.4 of the application learned counsel relied on paragraphs 6 of the affidavit of Birungi in which he deponed that the the applicant's counsel had neither read nor approved the terms of the order on record. This he submitted, was contrary to O.18 r. 7(2) of the C. P. R. This, was a fatal defect as failure to approve and sign the order by counsel of the applicant renders the order null and void. In support of his submission he quoted the authority of:

> Andrew Tendo v Express Transport Company and H. C. C. No. $180/92$

H. C. T CIVIL ITS Vol. 2 p. 42.

where it was held that a decree which is not extracted according to the provisions of the law is invalid and a nullity and subsequent proceedings and orders on the basis thereto are rendered null and void. He submitted that the present appeal which is based on such an order is incompetent.

In grounds No. 5 & 6 of the application counsel relied on paragraphs 8 and 9 of the affidavit of Birungi. He submitted that according to r. 86 $(1)$ $(q)$ of the Court of Appeal Rules the record of appeal filed by the appellant had to contain "a reasoned order". In the present appeal there was no "reasoned order" and indeed the terms of the order were being disputed. He submitted that the trial judge allowed the application reinstated the suit and ordered that the case be fixed for hearing. As the order does not include all the above it is not "a reasoned order".

He auoted the case of Farrab Incorporated v The Official Receiver and Provisional Liquidator [1959] E. A. 5 P.

as authority that failure to extract a formal decree before lodging an appeal renders the appeal incompetent. He referred to another authority of Barclays Bank (U) Ltd $v$ Eddy Rodgrigues Civil App. No. 5 of 1987 [1991] V KALR 123 and submitted that the Supreme Court's judgment in that case approved previous cases that extracting a formal order or a decree before filing an appeal was necessary. He prayed that the appeal be struck out for incompetence and prayed for costs in accordance with rule 81 of The Court of Appeal Rules, 1996.

In reply Mr. Masembe Kanyerezi counsel for the respondent submitted that the application was misconceived and unsustainable and should be dismissed. He argued that the appellant had taken all the necessary steps by filing the appeal within time and paid the prescribed fees. He submitted that the order reinstating the suit was given by the trial Judge on 27th May 1998 and the respondent had up to 10th June 1998 to file the notice of appeal. Although Annexture A to the affidavit of Birungi showed that the notice of appeal was filed on 28th May 1998 and fees paid on 2nd June 1998 that did not effect the validity of the notice of appeal as it was within the fourteen days time in which the notice of appeal should be filed. He quoted the case of Unta Exports Ltd. v Customs [1970] E. A. p. 648 for the authority that no document is properly filed until the fees have been paid.

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Counsel argued that the decree was properly extracted and he submitted that the date on which the judgment was given by the trial court i.e. 27th May 1998 appeared in the annexture B. The date of $25^{th}$ Mac 1995 was the day the Dy Chief Registrar signed and sealed the order. He submitted that O.18 r 7(1)C. P. R. had been satisfied. He further submitted that the order was valid even if counsel for the applicant had not approved and signed it. He referred to the case Kazoora v Rukuba, Supreme Court Civil Appeal No. 13/92 (unreported) for the authority that where an order extracted does not misrepresent the ruling and does not cause a miscarriage of justice, it is a valid order which should not be struck out.

In the alternative he submitted that the complaint about the irregularity of the order should be raised in the High Court and not to this Court. He quoted the authority of Inter Freight Forwarders (U) Ltd. vs. East African Development Bank. Supreme Court. Civil Appeal No. 33/92 [1993] 1V KALR 124. In that case the Supreme Court held that where there was a complaint about the decree signed by the Dy Chief Registrar in contravention of O. 18 r. 7 of C. P. R. the matter should not have gone to the Supreme Court as a ground of appeal. The aggrieved party should take the matter before the High Court according to Order 46 r. 8 of C. P. R.

Finally learned counsel submitted that the law had changed with regard to the documents which have to be filed when filing an appeal. According to rule 86 of the rules of this court there is no requirement of filing either an order or a decree when filing an appeal. He referred to the decision of this Court Kibuka Musoke William and Another vs. Dr. Appollo Kaggwa C. A. No. 46 of 1996 (unreported.) In that case it was held that a decree was no longer necessary when filing an appeal. He prayed court to dismiss the application with costs.

In reply Mr. Semuyaba learned counsel for the applicant insisted that this court had jurisdiction to strike out the notice of appeal and the appeal by reason of incompetence. He retaliated that the provisions of rule 103(1) were mandatory. Fees should have been paid on the day the notice of appeal was filed. He tried to distinguish the authority of Kibuka Musoke William & Another vs. Dr. Appollo Kaggwa on the grounds that in that case this court

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was dealing with a decree and not an order. There was a dispute about the terms of the order and a valid decree properly extracted was to be in the record of appeal. This was provided by rule 86 sub rule 10 of Rules of this court

From the bar learned counsel for the respondent informed court that there were no dispute about the terms of the order. However, this court did not have the record of appeal at the time of hearing this application and therefore, the applicant cannot rely on Rule 86 (10) of the rules of this Court.

Rule 81 of the Court of Appeal Rules provides:

"81 A person on whom a notice of appeal has been served may at any time either before or after the institution of the appeal, apply to the Court to strike out the notice of appeal or the appeal as the case may be, on the ground that no appeal lies or that some essential step in the proceedings has not been taken or has not been taken within the prescribed time".

Rule $86(1)$ of the rules of this court specifies the contents of the record of appeal.

Counsel for the Applicant is requesting this court to strike out the notice of appeal and the appeal for several reasons which can be grouped into two grounds, namely:-

- That the notice of appeal was not filed according to 1. law, and - The record of appeal lacks valid order. 2.

After addressing ourselves to the submissions of both counsel and the authorities referred to we find as follows:

That the notice of appeal was filed in time. Rule $75(2)$ of 1. the rules of this court provide that the appeal must be lodged within fourteen days after the date of the decision against which it is desired to appeal.

Rule $103(1)$ of the rules of this court must be read together with rule $75(2)$ . The fees must be paid at the time of lodging the document and in the case of an appeal this

means within fourteen days. We are entirely in agreement with the holding in UNTA EXPORTS Ltd v Customs that no document is properly filed until the fees have been paid or provided for by general deposit by an advocate.

We have considered the submissions of both counsel about the extraction of a decree. We are in agreement with submission of the counsel for the applicant that the decree was not properly extracted as required by law and therefore a nullity. We also agree with the submissions of counsel for the respondent that the complainant about this should have been raised in the High Court. However rule $86(1)$ (g) of the rules of this Court provides that what is required to be filed with the record of appeal is, inter alia, "a judgment or a reasoned order."

In our view "a reasoned order" means a ruling given by court as opposed to "an order" as defined in S. 2 of The Civil Procedure Act (Cap 65) namely:

"the formal expression of any decision of a civil court which is not a decree and shall include a rule nisi"

We wish to repeat what we said on the effect of rule 86 in the case of "KIBUUKA MUSOKE WILLIAM and Another vs DR APPOLLO KAGGWA App. 46/97 p.2,

"It is clear from the above provisions that the extraction of a formal decree embodying the decision complained of is no longer a legal requirement in the institution of an appeal. An appeal by its very nature is against the judgment or a reasoned order and not the decree extracted from the judgment or the reasoned order. The extraction of a decree was therefore a mere technicality which the old municipal law put in the way of intending appellants and which at times prevented them from having their cases heard on merits. Such a law cannot co-exist in the context of the provisions of the 1995 Constitution Art $126(2)(e)$ where the courts are enjoined to administer "Substantive justice without undue regard to technicalities."

For the above reason the application is dismissed with costs to the respondent.

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$\mathcal{M}^{\text{L}}$ <table><tbody>DatedatKampalaof... September1998-</tbody> $\ldots day$ this A. E. Mpagi-Bahigeine Justice of Appeal. J. P. Berko Justice of Appeal. Den,

Cris, Liumba C. N. B. Kitumba Justice of Appeal.