M and D Timber Merchants and Transporters Limited v Hwan Sung Limited and Another (Civil Application 152 of 2023) [2023] UGCA 166 (30 May 2023)

# TIIE REPIIBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

Coram: Irene Mulgagonla, JA (Sltttng as a slngle Judge)

## CTVIL APPLICATION NO. 152 OF 2023

5 (Artslug from Court of Appeal Ctvtl Appllcatlon No. 133 of 2o.23 & Civtl Appeal No O559 ol 2o221

(All artslng from Hlgh Court Civll Sult No. 4O9 of 2013)

### M&D TIMBER MERCHANTS

& TRANSPORTERS LTD :::i:3:3:::::3:::r:::::3::::3::33::::r3i3:: APPLICANT 10

#### VERSUS

1. HWANSUNGLTD 2. I(AMPALA DISTRICT LAND BOARD : i : : : : : : : :: : : :i : : : : : : : : : i : : : : : : : : :! : i 3 i 33 : : :RESPONDENTS I

#### RULING

The applicant brought this application under section 98 of the Civil Procedure Act and rules 2 (2), 6(21(bl, 42, 43,44 of the Judicature (Court of Appea-l Rules) Directions, SI-13-10. He sought an interim order to stay of execution of the judgment and decree in High Court Civil Suit No. 0409 of <sup>20</sup>1 3, until the hearing and final determination of the substantive application for stay of execution. The application was supported by the undated affidavit of Ddungu Ivan, a director in the applicant company 20 25

In his aflidavit in support of the application, Ddungu Ivan stated that he was dissatisfied with the judgment in HCCS No. O4O9 of 2018 which was in favour of the respondents herein. That the applicant frled an appeal in this court as Civil Appeal No. 0559 of 2022 and subsequently, Application N0.133 of 2023 for a substantive order for stay of execution. The applicant 30

further averred that the respondents have since commenced the execution process by serving the applicant with a notice of eviction issued on 15tt' September 2022. Ftrther, that a warrant of eviction and to give vacant possession to the respondents was issued against the applicant' He explained that the applicant filed an application for stay of execution in the High Court but it was dismissed.

Mr Ddungu further averred that if the application is not allowed, the applicant will suffer irretrievable and substantial loss because from the time the applicant acquired an interest in the land in dispute, she heavily invested in its development by backfilling, completing a wall fence and building additional storage structures thereon, to the tune of UGX 2,3OO,OOO,OOO. That if the applicant is evicted, the buildings on the land will be demolished and the land sold to a third party. That for those reasons, if the order to stay execution is denied, the l"t respondent may not be in a position to make good the loss to the applicant in the event that the appeal is successful. That this would inflict greater hardship to the applicant who is in possession of tlee suit land than the 1"t respondent who has never been in occupation thereof. 10 15

- 20 Mr Ddungu added that the applicant is ready, willing and able to abide by the conditions that may be imposed by the court and in the interests of justice, an order ought to be granted in the interim to stay execution until the linal disposal of the main application pending in this court. - The respondent opposed the application in an affrdavit affirmed by J. <sup>B</sup> Ahn, the Managing Director of the l"t respondent, on 12th May 2023, and that of Festus Kateregga, a Court Bailiff trading as Quickway Auctioneers & Court Bailiffs, which too was dated 12th May 2023. In the two affidavits, the deponents detailed the process of executing the orders of the court in 25

the suit, until the l"t respondent achieved vacant possession of the land. That as a result, the application was overtal<en by events. The lst respondent then prayed that the application be dismissed with costs.

5 The applicant filed an affidavit in rejoinder deposed by Ivan Ddungu on 16m May, 2023. ln his rejoinder, Mr Ddungu clarified that the main application for stay of execution pending before this Court is Civil Application No. 133 of 2023. Further, that the judgment and decree whose execution is sought to be stayed had several orders including orders requiring the applicant to pay UCX 2,000,000,000 as mesne profrts, UGX 300,000,000, as general damages and the taxed costs of the suit, being UGX. 399,921,42O. That it is therefore the lst respondent's intention to execute the decree with regard to the orders for the payment of money. 10

### <sup>15</sup> Representatlon

At the hearing of the application on Stt May, 2023, the applicant was represented by Mr. Felix Kintu Ntenza, while the l"t respondent was represented by Mr. Edward Anguria who was holding the brief for Mr. George Omunyokol. He appeared with Mr. Albert Byamugisha. Mr. Ddungu Ivan, a Director in the applicant company was present.

## Submlssions of Counsel

Counsel for the parties in the application filed written submissions as directed by court. They applied to court to adopt them as their final submissions and the prayers were granted. The application was therefore disposed of on the basis of written submissions.

In his submissions, counsel for the applicant referred to the decision of this court in Luwalira Noah Deogratlus & Another v Lwanga Enock &

Another; Court of Appeal Civtl Applicatlon No' 2O1 of 2021, for the principles that are followed by this court in determining applications for interim orders. He pointed out that there are three principles; i) that there is a competent notice of appeal, ii) there exists a substantive application for stay of execution, and iii) that there is a serious threat of execution.

Mr. Kintu Ntenza for the applicant submitted that at the time of frling this application, the applicant had not only frled a notice of appeal but also the substantive appeal, as Civil Appeal No. 0559 of 2022. Further, that the appeal was served upon the respondents. He explained that the applicant also filed an application for a substantive order of stay of execution before this court.

He further submitted that there is a serious threat of executing the decree since a notice of eviction and a warrant to give vacant possession was issued against the applicant. He stated that even though there was partial execution by a warrant to give vacant possession, the decree in HCCS No. o4o9 of 2013 had not been fully executed. counsel went on to state that there was no delay in frling the application for stay of execution before this Court beeer\*se-itbecause it was filed immediate ly after the application rn the High Court was dismissed.

- 20 In response, counsel for the 1"t respondent submitted that while they did not dispute that a Notice of Appeal was filed in this court, they had not yet been served with any application for stay of execution. That therefore, the application for an interim order "has no legs to stand on" and is incurably defective. - As to whether there was an eminent or serious threat of execution before the hearing of the substantive application for stay of execution, counsel stated that this application for an interim order was overtaken by events

because the 1"t respondent had already taken full possession and control of the land in dispute. Relying on the Supreme Court decisions in Kweslga

& 2 Others v Senyonga & 2 Others; SCCA No. 43 of 2O2L and Kasolo Roblns Ellls v Julius Joseph DelahatJe Geertruda; Supreme Court Civll

- 5 Applicatlon No. OO4 ol 2023, he reiterated that the interim order sought was overtaken by events and that it is moot and academic with no practical value. Further, that the status quo was that the lst respondent was already in possession of the land following the successful partial execution of the decree to obtain vacant possession. He added that they had not yet filed any application for execution ofthe rest ofthe orders in the decree because the applicant has no known assets that can be attached and sold to recover the decretal sum. He contended that no evidence was led by the Applicant to prove that there was an eminent threat of execution to recover damages, interest and costs. 10 - Counsel further submitted that the facto in Luwallra Noah Deogratlus & Another v Lwanga Enock & Another (supra) which the applicant relied on, were different from those in the instant case because in that case, execution had not been carried out while in the instant case, partial execution to create vacant possession had already been successfully conducted and the l"t respondent was already in possession of the suit land. 15 20

In rejoinder, Counsel for the applicant maintained that a substantive application, Civil Application No. 133 of 2023, for stay of execution was filed and is pending before this court. He submitted that this application was not been overtaken by events as the decree sought to be stayed has several orders that are yet to be executed by the 1.t Respondent. Relying on Kampala Flnanclal Services Ltd & Anor v Husseln Muhamad; Court of Appeal Ciwtl Application No. 146 of 2021, he reiterated that this application was not overtaken by events and therefore it is not moot as it also applies to the stay of execution of orders relating to mesne profits, general damages and costs.

counsel went on to distinguish the cases that were relied upon by the l"t respondent from the instalt matter. He stated that in the instant case, the

5 of the suit. decree of the High court whose execution is sought to be stayed has only been partly executed and so this court has jurisdiction to grant the interim orders relating to the payment of mesne profits, general damages and costs

## Determiaation

- The principles that are considered by the courts before granting interim orders for stay of execution were restated in Hwan sung Industrles Ltd v. TaJdin Huseeln & 2 Others, Supreme Court Civil Appllcation No' <sup>19</sup> of 2oo8. They are that the applicant must satisfy court of the following conditions: 10 - i) There b a competent notice of appeal filed in court; ii) There is a substantiue application and iii) There is a serious threat of exeantion. 15

I will therefore consider the criteria above as the issues to be determined in this application, on the basis of the facts that were presented by the parties hereto.

In the affidavit in support of the application, Mr Ddungu stated that <sup>a</sup> notice of appeal ald subsequently, an appeal was filed in this court but he did not furnish court with proof that an appeal was indeed frled in this court. However, the 1"t respondent did not rebut this. The fact that the appeal has been given a reference number in this court attests to the lodgement of the notice of appeal, as the bare minimum required for purposes of this application. As a result, the l"t condition stated above has been satisfied by the applicant.

As to whether there is a substantive application pending before this court, the intitulation to this application shows that there is in this court Civil Application No. 133 of 2023, from which this application arises. The fact is not disputed by the respondents. I therefore find that the second

criterion has been established towards the grant ofan interim order to stay

execution of the orders ofthe High Court. Turning to the third criterion, whether there is indeed an imminent threat of execution, counsel for the lst applicant acknowledges the fact that partial execution was levied against his client. However, he contends that the application that resulted in the eviction of the applicant from the land in dispute shows that the respondent also sought to execute against the applicant's property in order to recover the monetary aspects of the decree 10

amounting to UGX 2,300,000,000/=. That therefore, the application seeks an interim order for stay of execution to prevent the recovery of mesne profits, damages and costs. 15

I observed that the respondent's application for execution, Annexure B to the affidavit in rejoinder, shows that the respondents sought to recover the sum of UGX 2.3 billion as mesne profits and general damages awarded by court. They a-lso sought to recover by execution a total of UGX 495,556,920 as taxed costs against the applicant. The application for execution is dated 10th Ja-nuary 2023 and pursuant to that, the respondents did obtain an order to evict the applicant from the land in dispute and did so effectively, 20

as is shown in Annexures F to K to the affidavit in reply of J. B Ahn. Partial execution was therefore effected but there is nothing that would prevent the respondents from pressing on and recovering the decretal sum from the applicant, as they applied to the High Court. The claim that there 25

is nothing to execute against is not supported by any evidence to that effect. On the contrary, Ivan Ddungu states that the applicant is a going concern and has property in Uganda, which he lists in paragraph 7 of his affidavit.

I therefore find that the applicant has demonstrated that there is indeed a $\mathsf{S}$ serious threat of execution. Execution has already been levied against the suit property and the respondents do not deny it. Though the respondents claim they did not know of any assets against which to levy execution, the assets were disclosed to them during this application. The 3<sup>rd</sup> criterion has therefore been satisfied for the granting of an interim order to stay of 10 execution against the monetary decree.

In conclusion therefore, an interim order is hereby granted to stay execution of the monetary aspect of the decree that was granted to the respondents in HCCS 409 of 2013. The order shall remain in force till final hearing and disposal of Application No 133 of 2023 now pending before this court. The costs shall be in the cause.

Dated at Kampala this $3^{\circ}$ of May, 2023.

Irene Mulyagonja

**JUSTICE OF APPEAL**