Fairway Hotel Limited v Omongole and Another (Civil Application 284 of 2021) [2022] UGCA 333 (10 March 2022)

#### THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA HOLDEN AT KAMPALA

## CIVIL APPLICATfON NO. 284 OF 2O2]^

## (ARTSING our oF crvrl AppEAL No. 2oz or <sup>20141</sup>

#### BETWEEN

FAIRWAY HOTEL LIMITED APPLICANT

#### AND

1. OMONGOLE EMMANUEL

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2. NYENDE IBRAHIM..... RESPoNDENTS

#### RULING BY CHRISTOPHER GASHIRABAKE, JA

### (Single Justicef

This is an application by Notice of Motion brought under Rules 2(2), 100(2), 43 and aa(l) ot the Judicature (Court of Appeal Rules) Directions 51 13-10, where the applicant has moved this court to make orders that: -

- l. An interim order for stay of execution of the decree against the applicant is issued. - 2, The costs of this appiication ale proviclecl for.

The grounds of this application are set out in the affidavit of Richard Okallany, briefly that;

- 1. There is a serious threat of execution of the decree in Civil Appeal No. 2O7 of 2014, following its dismissal, the extraction of thc decree and the taxation of the bill of costs by the respondent. - 2. There is a substantive application for stay of execution pending before this court.

- 3. The applicant wrll suffer substantia,l loss and its application for restoration of the appeal as well as the appeal will bc rendered nugatory. - 4. The applicant is ready to fulfill conditions such as providing security for due performance of the decree. - 5. The application has been made without unreasonable delay by the applicant - 6. It is in the intcrests of justice that the application bc allowed so that the status quo is maintained.

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In further support of the Motion, Azhar Jaffer the managing director of the applicant/appellant company swore arr additional and supplementary affidavit. He averred that on the 5th November,2O2l he was served with a Notice to Show Cause Why Execution should not Issue. That this Notice to show cause was adjourned on severa\_l occasions, frorn 9ft November, to 14th day Decernber 2021, and then 24th Jartluary,2022. Thc fact that the Notice to show cause is still in the system and has not been dismissed, shows that the threat of execution still exists. Since an order for stag of proceedings doesn't operate as an order for stag of execution, any time the proceedings can be resumed.

O In his supplementaqz affirmation in support, Azhar Jaffer avers that there's another attempt to execute against the applicant through civil Applical-ion No. 393 of 2021 , filed by Oging Co. Advocates. That in his application he secks ordcrs that this court compels the applicant to pay in court Ug. Shs. 76,000,000/= (seventy six million only) plus interest pursuant to an advocate client agreement entered into between and or amongst himself and the respondent on the 24th day of January, 2O13.

In reply to the Motion Mr. Omongole EmmanueL swore an afiidavit in reply where he averred that, this application has been overtaken by events since the learned Deputy Registrar has already stayed proceedings owing to a pending appeal by the applicant itself. With the directives of the Deputy Registrar there's no serious threat of execution owing to the fact that all proceedings have been stayed.

## Representation.

The applicant was represented by Mr. Noah Magumba and Mr. Mayambala Michael whereas the respondent was represented by Mr. Rogers Muhumuza.

## Submissions

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Counsel for the applicant averred that the requirements for an interim order for stay ofexecution to be granted on appeal are three and they have been laid down in the case of llwan Sung Industries Limited vs. Tqidin Hussein & 2 Ors SCMA No. 19 of 2OO8, namely:-

- a. A competent Notice of Appeal - b. A substantive Application of Stat uf Excuuliurr ;arrd - c. A serious threat of execution

Counsel further submitted that on 2"d April, 2O14 this court granted the appellant an extension of time within which to lodge its Notice of appeal. That on 4th April the appellant hled the Notice of appeal with the leave of court. Additionally on substantive stay of execution, the applicant filed civil application No. 79 of 2O2l .

On whether there's a threat of execution, the applicant submitted that the respondent had already contemptuously executed against the applicant against the Orders of Court of Appeal in 2O14, and have returned for a second time to execute. The respondent executed by selling three motor vehicles of the applicant company i.e. a Mitsubishi Canter UAE 422T, Toyota Granvia UAN 246W and a Toyota Noah UAR, 4098, which cars or their value has never been relinquished to the applicant as ordered by a full panel of court of appeal.

Counsel for the applicant averred that there's a double threat of execution, the first Notice of Cause No 2812021 for Ugs. 137,760,96O/= ( One hundred, thirt5r seven million, seven hundred and sixty thousand, nine hundred sixty shillings only) and the second arising out of an application for execution by Oginga Joseph who seeks recover of 76,000,000/: (seventy six million only) vide Civil application No. 393 of 2021.

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Counsel made reference to Luwalira Noah Deogratias & Anor vs. Lwanga Enock, Civil Application No 2O1 of 2O2L, where Justice Cheborion Barishaki relied on the Supreme Court ruling in G v. C SCCA No.2 of 2OO3, where Justice Bart Katureebe held that

> '... I am also satisfred that the respondent has extracted <sup>a</sup> decree and has a certifrcate of taxation. He could, if he wished, proceed to execute, and this would render the applications nugatory. I am of the firm view, therefore, that this is a case where I should exercise the inherent power under Rule 2(21 of the Rules of this Court to grant an

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interim stay of execution until the court determined the main application."

## Respondent's submissions.

Counsel for the respondent averred that the application is overtaken by events, the specific event being that there is a ruling by the learned Deputy Rcgistrar staying all proceedings until disposal of Taxation reference No. 394 of 2021 . Counsel for the respondent further avcrred that the applicant does not have any evidence contradicting the ruling by the learned Deputy Registrar.

# Applicant's rejoinder

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I have read through the submissions of the applicant in rejoincler, and it is submitted that therc are two kinds o[ threats of cxccution. Further that the Deputy Registrar has no power to make an order for stay of proceedings as she is precluded by Rule 53 of the Judicature (Court of Appeal) Rules.

## Court analysis

Rule 2(2) of the Judicature (Court of Appeal Rules) Directions grants this court powers to make such orders inter alia as may be necessary for achieving the ends of justice.

> (2) Nothing in these Rules shall be taken to limit or otherwise affect the inherent power of the court, or the High Court, to make such orders as may be necessa5r for attaining the ends of justice or to prevent abuse of the process of any such court, and that power sha1l extend to setting aside judgments which have been proved null ald

void after they hzrve been passed, and shall bc cxerciscd to prevent abuse of the proccss of any court causcci by delay.

# In Zubeda Mohamed & Anor vs. Laila Wallia & Anor, Civil Reference No.07 of 2OL6, court held that;

The principles followed by our courts were clearly statccl in the celebrated case of Ifwang Sung Industries Limited v TaJdin Hussein & Others, SC Civil Application No. 19of 2OO8 where Okcllo JSC, as he thcn r,.,as saicl:

> "For an application for an interim stay, it sufl-rces to show that a substantive application is pending and that there is a serious threat of execution before the hearing of the suhrstantive application. It is not necessary to pre-empt consideration of matters necessary in deciding whether or not to grant the substantive application for stay."

Notably the applicant must prove the existence of three conditions before the grant of an interim stay of execution, i.e;

<sup>1</sup>. A Competent Notice of Appeal;

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- 2. A substarltive application; and - 3. A serious threat of execution.

This court and the Supreme Court have on several occasions re-laid that the purpose for the grant of an interim stay of execution is to preserve the status quo. This would enable court to determine the matter on its merits but also helps to prevent irreparable harm to the successful party. Otherwise the main application and the appea-l would be rendered nugatory if the status quo is interfered with. Supreme Court in Yakobo Senkungu and others vs. Cerencio Mukasa, SC Civil Application No. 5 of 2013, held that, the granting of interim orclcrs is meant to help parties to preserve the status quo and then have the main issues between the parties determined by the full court as per the Rules'

Regarding whether the applicant has fulfilled the first ground of the application Mr. Azhar Jaffer in paragraph 8 and 9 of the additiona-l affirmation affidavit dated 27th Janua4r, 2022, averred that in pursuant to civil application No.347 of 2013, court on 28th March 2014, granted the appellant an extension of time within which to lodge its Notice of Appeal within 14 days. In compliance with that order the appellant filed a Notice of appeal on 4th April 2014. This court is therefore satisfied that the there is a Notice of Appeal before it.

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On the second ground for grant of the application, recourse is made to paragraph 12 of the additional affirmation affidavit of Mr. Azhar Jaffer, where it is averred that the applicant filed Civil Application No. 79 of 2021 , for orders of stay of execution. The existence of this application is evidenced by annexture E to the additional aflirmation. The respondent did not object to this fact. This court is satished that this condition too has been satisfied.

Lastly is whether there's a serious threat of execution. According to the submissions by both cor.rnsel it is evident that this is what is disputed by the respondent. It is the respondents'submission that there's an order by the Deputy Registrar staying all the proceedings as such there's no threat of execution. On the other hand, counsel to the applicant submits that there's a double threat of execution

and nevertheless the Deputy Registrar does not have such powers to make orders of stay of proceedings.

On whether the Deputy Registrar has jurisdiction to make such orders like stay of proceedings, recourse can be macle to the Court of Appeal (Judicial Powers of Registrars) Practice Direction No1 of 2OO4, which is rc-laid verbatim.

## PRACTICE DIRECTION NO.1 OF 2OO4

'fhe Court of Appeal (Judicial Powers of Rcgistrars) Practice Direction.

PURSUANT to the Court of Appeal Rules Directions 1996 mode under

Seclion aI (2) (w) of the.ludicature Act 2000, and in order to cnsurc expeditious disposal of cases, the powcrs of Regisl-rars shall include, but rrt-r I be lirrritcd t<-r entertaining matters undcr the following rules.

1. Rule 4- Extension of time

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- 2. Rule 5 Applications for Interim Orders - 3. Rule 3a (2) (c) Approval ofsuch contested orders / decrees - 4. Rule 93 Orders on withdrawal ofan appeal / application - 5. Rule I l2 Ordcrs uu relief lrulr lees arrtl scr:urity in civil apprcal.

This Direction is issued this 2"d day of July 2004.

EU Odoki CHIEF JUSTICE..."

Under Paragraph 2 of the above Practice Direction, the Deputy Registrar of this court is empowered to handle applications for interim Orders under , Rule 6 (2) (b) of the Rules of this court.

Rule 6 (2) (b), provides that,

'ln any civil proceedings, where a notice of appcal has been lodged in accordance with rule 76 of these Rules, order a

stay of execution, arl injllnction, <>r a stay of proceedings on such terms as the court may think just'

In the' Muwema & Mugerwa Advocates vs. shell (U) Ltd and 10 others, Justice A. E. N Mpagi Bahigeine, (DCJ as she then was) held

> "...the Court of Appeal (Judicial Porvers of Registrars) Practice Direction No I of 2004 made under Section 41 (l) (v) of the Judicature Act 20O0, Rulc 5 mzrndatcs Reilistrars to issue intcrim orders to ensurc expeditious disposal of CASCS

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It has been held by this very court that Practice Direction No.1 of 2004, does not take away the jurisdiction of the justices but rather it is a case management tool to ensure that the cases are heard expeditiously. See Mohamed Kalisa vs. Gladys Nyangire Karumu alad 2 others Civil Reference of 139 of 2OL3, Court went ahead and noted that examples of the matters to be handled by the Registrar under Practice Direction No.1 of 2004 include;

> 'Times frames; scheduling conferences; alternative dispute resolution, interlocutory applications zrnd discoverics and intcrrogatorics to mcntion but a few........'

Considering the above authorities decided by this court, I am safe to say that the Deputy Registrar has such powers to make interlocutory orders as one made by the Deputy Registrar of this court. The question however is, did that order of stay of proceedings stay the proceedings before this court? The order made by the Deputy Registrar viz,

"Since there is:r rcfcrencc filed ag:rinst the costs. C. A No. 394 OF 2021. I will stay these proceedings until it is disposed of, but also note there is alreadg a ruling rr,ga;in'st the contempt and its ord.ers are clear. Theg d.o rrot stop execution but court can olfset ang monies pald under the partlal executlon."

The wording of the order of stay of proceedings by the Deputy Registrar was specific on what proceedings the orders sought to stay; the key words at this point are 3'I will stqg these proceedings" the stay did not seek to stay proceedings before this court but only the proceedings before her court. Her Worship explained the reason for the grant in the circumstance. She further cautioned the parties, that this stay of proceedings does not act as a stay of execution, and even went ahead to remind the parties of the existing ruling on conterrlpt whose orders were very clear. She stated that the orders do not act as stay of execution but court will offset any monies under the partial execution. In essence the Deputy Registrar was alive to the fact that the order she had made does not operate as an order for stay of execution.

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The Registrar's exercise of power under the Practice Direction 1 of 2OO4, to stay execution proceedings before her did not deter this court from hearing and granting an interim Order of stay under the prevailing circumstances.

From the above analysis, the threat of execution is glaringly evident and cannot be denied by the respondent. I agree with counsel for the applicant that there's a double threat of execution, the Notice to show Cause No 28/2O2L for Ugs. I37,760,9601= ( one hundred

thirty seven million, seven hundred and sixty thousand nine hundred, sixty shillings only) and the second one arising out of an application for execution by Oginga Joseph who seeks to recover $76,000,000/$ = (Seventy Six million only) vide Civil application No. 393 of 2021. It has been averred by the applicant which averments the respondents do not deny that there has been a contemptuous execution and the respondents seek to execute again.

It is therefore in the interest of justice that this court exercises its inherent power to grant the interim stay of execution in order to preserve the status quo until the determination of the substantive stay of execution before the full bench. Otherwise the appeal and the main application will be rendered nugatory.

This application is therefore granted and costs referred to the main application and appeal.

Dated at Kampala this.................................... C. GASHIRABAKE

**JUSTICE OF APPEAL**