Master Grain Milling Limited v Cargo Movers Limited (Miscellaneous Application 830 of 2022) [2023] UGCommC 284 (13 April 2023)

Full Case Text

### THE REPUBLIC OF UGANDA

## IN THE HIGH COURT OF UGANDA AT KAMPALA

### ICOMMERCTAL DtVrSrONl

# MISCELLENEOUS APPLICATION NO. O83O OF 2022 (ARTSTNG OUT OF CrVrL SUIT NO. 501 OF 20r7)

## MASTER GRAIN MILLING LTD:::::::::::::::::APPLICANT/APPELLANT VERSUS

# CARGO MOVERS LTD::::::::::::::::::::::::::::::::::::::::::::::RESPONDENT BEFORE: HON. LADY JUSTICE ANNA B. MUGENYI RULING

The Applicant brought this application under section 33 of the Judicature Act cap I3, Section 98 of the civil procedure Act cap 71 , order 22 Rules 23 & 26 of the civil Procedure Rules s.l 7l-l for an order of stay of execution of the decree in civil Suit No. 501 of 2017 until the final determination of court of Appeal No. 290 of 2021 , and for costs of the Application.

#### Grounds of the application.

The grounds of the Application are laid down in the affidavit of Itaaga Swamit, the Appellant's Managing Director, and are briefly that on l2rh February 202r,Hon. Lady Justice Anna B. Mugenyi delivered judgment in civil Suit No. 501 of 2017 in favour of the Respondent, and that there is a serious threat of execution of the decree in that suit. That the Appellant being dissatisfied with the whole decision of the trial Judge, filed a Notice of Appeal in the Court of Appeal. That the Respondent has commenced execution by way of gamishee proceedings and they are likely to resort to other modes ofexecution against the applicant; whereby the

-.n-

Applicant stands to suffer substantial and irreparable loss if the order of stay of execution pending final determination ofthe appeal is not granted.

That the Application has been made without unreasonable delay, and the Applicant undertakes to furnish security for the due performance of the decree upon final determination ofthe appeal. In addition, that the appeal may be rendered nugatory if the application is not granted, and that the respondent will not be prejudiced in any way.

The Application was opposed by the affidavit of counsel David Mukiibi Semakula, an advocate in the Law Firm representing the Respondent. He contends that Appellant only filed their Memorandum of Appeal 190 days from the date of receipt of a certified copy of the record of proceedings, which is outside the 60 days allowed. He therefore contends that there is no valid appeal in place to be protected by the issuance of an order for stay of execution. He added that there is currently no threat of execution and thus no need for protection. Also that part of the debt owed arises from a consent Judgment from which the Appellant has no right of appeal. counsel also contends that the application was made belatedly as the Applicant has not deposited security for due performance of the decree.

#### REPRESENTATION

The Applicant was represented by IWS Frank Tumusiime & co. Advocates whereas the Respondent is represented by M/S MMAKS Advocates.

#### RULING

Before I delve into the merits of the application, I will first handle the preliminary objection raised by counsel for the Applicant on the competence ofthe affidavit in reply being sworn by the Respondent's counsel in contravention of Regulation 9 of the Advocates (Professional conduct) Regulations sl 267-2. The last part of

Regulation 9 above does not prohibit an advocate from giving evidence either orally, verbally or by way of affidavit on formal or non-contentious matters of fact.

In this case, information in paragraphs 2 to ll of the affidavit in reply are none contentious facts which came to the deponent's knowledge by virtue of being an advocate for their client, the Respondent. whereas the Applicant counsel argues that an application for stay of execution is a contentious matter, which is true, the facts that Regulation 9 envisage are not those facts such as the dates when di fferent events pertaining to the case happened, and these are not contentious. They are facts, therefore counsel is entitled to give such evidence. In addition, the deponent is not even in personal conduct of the Application, therefore I find no irregularity with the Affidavit, it is competent and therefore, the preliminary objection is hereby ovemrled.

Now I will proceed to the merits of the application. I have carefully looked at the pleadings and submissions, and it is clear that this is an application where the Applicant seeks for an order of stay of execution of this court,s orders pending determination of its appeal to the Court of Appeal.

Stay of execution is provided for under order 43 of the civit procedure Rules, and the conditions for grant are specifically provided for under order 43 Rule 4 (3) of the civil Procedure Rules which states that an order of stay of execution will only be made if the court is satisfied that substantial loss may result to the party applying for stay ofexecution if the order is not made, or that the application has been made without unreasonable delay, and that security has been given by the applicant for the due performance of the decree or order as may ultimately be binding upon him or her.

s--

Further, order 22 Rules 23 and 26 of the civil Procedure Rzles provide that stay of execution may be granted for sufficient cause or on such security pending determination of the pending suit. I will now consider each ground.

The conditions that need to be proved for grant of an order of stay of execution were also stated in the case of ll/alusimbi Mustafo v Musenze Lukia High court Miscellaneous Application 232 of 2018 and they include:

- i. That substantial loss may result to the applicant unless the order is made. - ii. That the application has been made without unreasonable delay, and - iii. That security has been given by the applicant for due performance of the decree or order as may ultimately be binding upon him or her.

### That substantial loss may result to the applicant unless the order is made.

In paragraph (e) of the Notice of Motion, the Applicant contends that they stand to suffer substantial loss and irreparable loss if the order for stay of execution pending final determination of appeal is not granted. The Applicant further states in paragraph 9 of the affidavit in support that the Respondent has commenced execution by gamishee process, and that he was afraid that they would resort to other modes of execution that would frustrate the Applicant's grain milling operations. The deponent further states in paragraph 13 that the decretal sum is large and if paid before the appeal is heard may not be recovered from the respondent, and that it will result in substantial loss.

The courts have often defined 'substantial [oss' and in Andrew Kisowuzi v Dan Oundo Malingu HCMA 467 of 201 3 it was held that;

"...substantial loss cannot mean ordinary loss or the decretal sum or costs which must be settled by the losing party but something more than that.... the applicant

s,.v

should go beyond the vague and general assertion of substantial loss in the eyent a stay order is granted"

Justice ogoola further gave more insight on substantial loss in Tropical commodities suppliers Ltd and others v International Credit Bank Ltd (In Liquidalion) (2004)2 EA 331, where he opined that 'substantial loss does not represent any particular amount or size, for it cannot be quantified by any particular mathematical formulae. It refers to any loss, great or small that is of real worth or value as distinguished from loss without a value or that which is merely nominal. It is my considered view then that, the Court ought to consider substantial loss claimed by an applicant in light of the particular facts raised by each case.,

In this case, as confirmed by the Appellant, the Respondent only obtained a garnishee order for execution and has not ventured into any other mode of execution. The gamishee involves attachment of money which can always be paid back in case the Appeal is successful. The Appellant's fear that the Respondent could resort to other means of execution frustrating their grain milling operations is simply speculative; and court cannot act on speculations without eminent threat to suffering a substantial loss. I therefore find that the Appellant has not proved this ground, and it fails.

## That the application has been made without unreasonable delay

Under paragraph 14 of the affidavit in support, the deponent avers that this application of stay of execution was filed without any unreasonable delay as the threat of execution arose on 1'r June 2022 when the Applicant's bankers were made aware of the application for a Garnishee Nisi, which was made absolute on lgm lune2022.

N-\

I have looked at the evidence on record and find that the Garnishee Nisi was served on the Applicants on 2Os May 2022, and that the Notice of Motion was uploaded on ECCMIS on 3Oe June 2022. Therefore, this is not a long time, and therefore there was no inordinate or unreasonable delay in filing the Application, this ground succeeds.

I have looked at the arguments fronted by Counsel for the Respondent on whether the Applicant has a valid appeal and I will not delve much into it because the Appeal is before the Court of Appeal and it is not the role of this this Court to pre-empt the same. Any objections pertaining to its validity should be filed before the same Court and in any case, the conditions for grant are clearly stated under Order 43 Ruie 4 (3) of the Civil procedure Rules and having a valid appeal is not one of them.

That security has been given by the applicant for due performance of the decree or order as may ultimately be binding upon him or her.

Order 43 Rule 4(3) (c) of the Civil Procedure Rules which provides for security states:

"That security has been given by the applicant for due performance of the decree or order as may ultimately be binding upon him or her. "

A simple interpretation of that rule implies that the order will be granted where security for due performance has already been given.

In this instant case, the Appellant has not yet given security for performance but has expressed willingness to deposit the same in paragraph l5 of the deponent's affidavit. However, counsel for the Applicant relied on the Supreme court decision in Margaret Kato v Nuulu Nalwoga supreme Courr M. A No. I I of 201 I to pray that the order be granted without a requirement to deposit funds for due performance.

u \$'{'

I agree with the submissions of counsel for the Respondent that the case of Margaret Kato v Nuulu Nalwoga supreme Court M. A No. t I of 20l l relied on by the Applicant is inapplicable to this case and that order 43 rule 4(3) of the civil Procedure Rules is the relevant order for grant of stay of execution by the court and the said Rule provides for the deposit of security for the due performance of a decree.

It appears the Applicant is not committal on the payment of security for the due performance of the decree as provided in order 43 Rule a(3) (c) of the civil Procedure Rules otherwise it would have paid the same. This is also confirmed by submissions by counsel for the Applicant wherein he prayed that the order be granted without a requirement to deposit funds for due performance without providing satisfactory reason for not doing so. This ground fails accordingry.

All in all, and considering all the above reasons, the circumstances of this case are not one that would permit this court to deprive the Respondent of the fruits of their judgment pending determination of the appeal.

Therefore, the Application has no merit and is hereby dismissed with costs to the Respondent.

...................tr)44.1.',..1. ^ld\*..

HON. LADY JUSTICE ANNA B. MUGENYI DATED......... ....... J.3 7-0 L3 I