Mohammed Ssebaggala and Another v Diamond Trust Bank Limited (Civil Application No. 724 of 2024) [2025] UGCA 218 (4 July 2025)

Full Case Text

### THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

### **CIVIL APPLICATION NO. 724 OF 2024**

### (ALL ARISING FROM CIVIL APPEAL NO.136 OF 2019)

$10$ MOHAMMED SSEBAGALA 2. SHAMIMU NAMUDDU:::::::::::::::::::::::::::::::::: **VERSUS**

DIAMOND TRUST BANK LIMITED::::::::::::::::::::::::::::::::::::

15 BEFORE: HON. JUSTICE MUSA SSEKAANA, JA (Sitting as a Single Justice)

#### **RULING**

This application was brought by way of Notice Motion under Rules 2(2), 6(2), 42,

- 20 43 of the Judicature (Court of Appeal Rules) Directions S. I 13-10 seeking the following Orders that; - a. An order staying execution for the Judgment and Decree in HCCS No. 333 of 2015 be issued pending hearing and determination of Civil Appeal No. 136 of 2019.

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- b. Costs of the Application be provided for. - c. Any other order(s) that this Honourable court deems fit in the premises.

The grounds in support of the application are briefly set out in the Notice of 30 Motion and the affidavit in support sworn by MOHAMMED SSEBAGALA, briefly stating that;

1. Judgment in High court Civil suit No. 333 of 2015 was determined by Hon. Lady Justice Anna B. Mugenyi in her Judgment dated 11th January, 2019.

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- 2. The applicants being dissatisfied with the decision of Hon. Lady Justice Anna B. Mugenyi instructed their lawyers then M/s Nabukenya, Mulaira & Co. Advocates to prefer an Appeal to this Honorable court. - 3. The applicants have a pending appeal before this Honorable court vide Civil Appeal No. 136 of 2019. - 4. The applicants applied for stay of execution before the High Court vide Misc. Applic. No. 213 of 2021 which was denied by the Learned Trial Judge. - 5. The respondent has applied for execution upon denial of the application for stay of execution and a notice to show cause why execution should not issue has been issued for the 30th September, 2022. - 6. The applicants are interested in prosecuting this Appeal to its logical $15$ conclusions and if an order of stay of execution is not granted the Appeal pending before this Honorable court shall rendered nugatory. - 7. It is in the interest of justice that this application is granted.

The respondent on the other hand filed an affidavit in reply to the application, $20$ briefly stating;

- 1. That in the judgment, the applicants were ordered jointly and severally, to pay the respondent a sum of Ugx. 400,000,000/= (Uganda Shillings Four Hundred Million only) interest thereon at the rate of 18% from 14th April 2014 until payment in full and costs of the suit; - $25$

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- 2. That the respondent's bill of costs was taxed and allowed at Ugx. 22,000,000/= (Uganda Shillings Twenty-Two Million only); - 3. That the judgment debt inclusive of costs is to date in excess of Ugx. 1,028,000,000/= (Uganda Shillings One Billion Twenty-Eight Million only) as of February 2023, and continues to accrue interest at the rate of 18% per annum:

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- 4. That the applicants filed an application for stay of execution in the High Court on 18th February 2021 i.e two (2) years after handing down of the judgment which application was dismissed inter alia on the basis that it had been filed in ordinately late and further that the applicants had not furnished security for the due performance of the decree, these being mandatory legal requirements. - 5. That the 1st applicant has structured his affairs to immunize his assets from attachment and/ or recovery by financial institutions as evinced hereunder; - The 1st applicant obtained loans from the respondent to purchase the $(i)$ property comprised in Block 221 Plot 1965 land at Nalyako which property secured the said loans. Upon default being made, he connived with his other wife Rehema Ssebagala to file a suit vide Civil Suit No. 225 of 2014 Rehema Ssebagala vs. Mohammed Ssebagala & Diamond Trust Bank Limited seeking for cancellation of the mortgage deed contending that spousal consent had not been obtained. - The 1st applicant obtained a loan from Stanbic Bank for which he $(ii)$ pledged the property comprised in Block 250 Plot 514 land at Bunga. Upon the Bank commencing foreclosure action his other wife Namayanja Maria Kiwanuka filed a suit vide Civil Suit (Land Division) No. 591 of 2013 Namayanja Mariam Kiwanuka vs. Stanbic Bank & Mohammed Ssebagala seeking for cancellation of the mortgage on the basis of lack of spousal consent. - In both suits in (i) and (ii) above, the $2^{nd}$ applicant as wife to the 1st $(iii)$ Applicant had signed off the spousal consent consenting to the pledging of the property;

6. That in the Judgment of High Court in (Land Division) Civil Suit No. 591 of 2013 (details set out in paragraph 7(ii) above), the Court expressly made a finding that the $1^{st}$ applicant was not honest in his dealings with Stanbic Bank in respect of the suit property which was the residence of his other

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wife, Namayanja Mariam Kiwanuka, and to date this finding has not been *set aside on appeal;*

7. That the $1^{st}$ & $2^{nd}$ applicants are neither engaged in any known business, their former businesses i.e Ssebagala & Sons Electro Centre and World of Lights are no longer going concerns and with no physical location/premises;

8. That the applicants have neither provided security for due performance of the decree and the Ugx. 200,000/= (Uganda Shillings Two Hundred Thousand only) security referred to in his Affidavit in Support relates to the mandatory security for costs of the appeal (paid pursuant to Rule 83 (1) (d) of the Court of Appeal Rules Directions).

9. That the respondent is licensed and regulated by Bank of Uganda with a capital of in excess of the minimum statutory requirement of Ugx. 25,000,000/= (Uganda Shillings Twenty-Five Billion only) and would be in a position to pay the decretal sums as well as the taxed costs in the unlikely event that the Applicants appeal is successful;

10. That if the Court is inclined to allow this application it should do so upon the Applicants complying with the legal requirement to provide security for the due performance decree and a deposit of the entire decretal sum and taxed costs in Court would in the circumstances of this case be appropriate;

#### Representation

At the hearing, the applicant was represented by Counsel Justine Nakyanzi, 30 *Counsel Derrick Bazekuketta* and *Counsel Ernest Ssembatya for the respondent.*

## Both parties filed written submissions

Counsel for Applicants' submitted that Rule 6(2) (b) of this Court is to the effect that the institution of an Appeal shall not operate as a stay of execution but the court may in any civil proceedings where a notice has been lodged in accordance

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with Rule 76 of these Rules order a stay of execution, an Injunction or a stay of proceedings on such terms as the court may think just.

That the considerations for stay of execution have been highlighted in a number of cases GASHUMBA MANIRAGUHA -VS- SAM NKUDIYE SCCA NO. 24 OF 2015, HON. THEODORE SSEKIKUBO & ORS -VS. ATTORNEY GENERAL & ANOR

10 CONST. APPLIC. NO.06 OF 2013, ATTORNEY GENERAL -VS- EDDIE KWIZERA (CONSOLIDATED) SUPREME COURT CONSTITUTIONAL APPLIC. NO. 01 OF 2020 where the Supreme Court observed that in order for the court to grant an application for a stay of execution

a) The lodgment of a notice of appeal and request for certified copies of the

record of proceedings to enable him or her to file a memorandum of appeal.

- b) The Applicant must establish that his appeal has a likelihood of success or a prima facie case of his right of appeal. - c) It must be established that the applicant will suffer substantial loss or that the appeal will be rendered nugatory if a stay is not granted; - d) If 1 and 2 above have not been established, court must consider where the 20 balance of convenience lies. - e) The applicant must also establish that the application was instituted without delay.

Counsel for the applicants' noted that shall move to address this Honorable court 25 on the considerations for grant of an application for stay of execution as above highlighted;

That the $1^{st}$ applicant in his affidavit in support affirmed that himself together with the 2nd applicant being dissatisfied with the decision of the Learned Hon. Lady Justice Anna B. Mugenyi delivered on the 11th January, 2019 preferred an

30 appeal to this Honorable court which appeal is in advanced stage as the parties already filed their respective conferencing notes pending scheduling dates for hearing before the Learned Justices of this court.

Counsel referred this Honorable court to paragraphs 2 - 6 of the Affidavit in support and annexures "C" and "Collectively which include the Memorandum of

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Appeal and the extracts of the parties' conferencing notes before this Honorable $\mathsf{S}$ court.

The applicants counsel stated that the Appeal before this Honorable court is past the Notice of Appeal, the Memorandum of Appeal was lodged; it has already been conferenced and only pending hearing before the Learned Justices of this court.

That this Honorable court finds that the consideration of lodgment of the Notice $10$ of Appeal is fulfilled.

Counsel for the applicants averred that the appeal has a likelihood of success; though this Honorable court is not at this stage deciding the appeal, it must be satisfied that the appeal raises issues which merit consideration by court. See

#### GASHUMBA MANIRAGUHA -VS- SAM NKUDIYE SCCA NO. 24 OF 2015. 15

That the applicants through their affidavit evidence have illustrated that the appeal lodged in this Honorable court raises serious questions of law and fact which need to be clearly investigated by this honorable court and they further highlight the grounds of appeal before this Honorable court and attached the

Memorandum of Appeal as annexure "C" to their Application. 20

The applicants counsel highlighted that the appeal before this Honorable court hinges on the error of the trial court not considering the Appellant's defence that he was servicing the loan that was disbursed by the respondent and the trial court basing its judgment on evidence which it rejected to arrive at its decision yet the

evidence on record depicted otherwise.

Counsel for the applicants argued that Ground 1 of the appellant's appeal is in regard to the Learned Trial Judge declaring that the 1st applicant is indebted to the respondent to a tune of Ugx 400,000,000/= which was indeed an error the respondent's claim in the Trial court was for recovery of Ugx 43,913,976/= the

learned trial judge did not consider the defence of the 1st appellant servicing her 30 loan but declared him indebted to a tune Ugx 400,000,000/= with no mathematical formulae of how the trial court reached that decision.

That ground 4 of the appeal is in regard to a payment that the respondent was to receive from Hood Sentongo in settlement of the debt and the trial court erred

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- when it held that the $1^{st}$ applicant failed to prove that the respondent received $\mathsf{S}$ payment yet there was a tri-partite agreement which set obligations to all parties including the respondent herein but the trial court exonerated the respondent of any obligation to that effect. - That ground 5 of the appeal is in regard to the defence of the 1st appellant of 10 servicing the loan which the trial court never considered yet the evidence of servicing the loan was led by the respondent's witness who highlighted the amounts in principle and interest that were deposited and collected from the 1st appellant's account in servicing the loan.

Counsel for the applicants submitted that the appeal lodged by the appellants before this Honorable court raises serious questions, they raise a prima facie case 15 fit for consideration by this honorable court and there are high chances of success.

Counsel prayed that this honorable court finds so and that the applicants have fulfilled this consideration.

- The applicants noted that it was held that the phrase substantial loss doesn't $20$ represent any particular amount / size, it cannot be qualified by any particular mathematical formula. It refers to any loss great or small, of real worth / value as distinguished from a loss that is merely nominal. See TROPICAL COMMODITIES SUPPLIES LTD & 2 ORS -VS- INTERNATIONAL CREDITS BANK LTD (2004) 2 EA, 331. - The 1st applicant averred that the execution is very likely to cause hardship and 25 loss against him as the monies to be executed are hefty in amount amounting to over Ugx 800,000,000/= the very sums that he paid in servicing the loan and beyond only for the trial court not to consider his defence that he serviced the loan. - Counsel for the applicants stated that execution of a decree of over Ugx 30 800,000,000/= against an individual and not a corporate entity will surely cause hardship to the applicants as Ugx 800,000,000/= is by no means a small sum of money. We refer to MARGARET KATO & ANOR -VS- NUULU NALWOGA SCCA NO. 11 OF 2011.

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- That if stay of execution of the decree of the High court is not stayed pending $5$ determination of the appeal and the respondent executes the decree through arrest and detention of the Applicants; no amount of damage will be able to atone for the substantial loss that shall be suffered by the appellants if the appeal succeeds. - 10 Counsel for the applicants referred to the case of HON. SEKIKUBO THEODORE & ORS (SUPRA), it was held that the main purpose of this application is to preserve the status quo and the applicants' right of appeal are safeguarded pending the disposal of the appeal and that it is the duty of this court to ensure that the intended appeals if successful are not rendered nugatory. - The applicants' appeal pending before this honorable court which is at an $15$ advanced stage will be rendered nugatory and the interest of justice will be better served if the Decree is stayed to give an opportunity to this honorable court to determine Civil Appeal No. 136 of 2019.

Counsel for the applicants submitted that the balance of convenience lies with 20 the applicants who paid huge sums of monies to the respondent in servicing the loan disbursed to them and now the respondent institutes a suit against them claiming monies way beyond what they applied for in a loan, what they serviced thus their need for this honorable court to re-appraise the evidence before the Trial court and come up with its decision.

25 Counsel emphasized that the appeal before this Honorable court is in advanced stage; conferencing having been concluded and only needs scheduling a hearing date.

The applicants stand to lose if the appeal succeeds and execution was effected against them as thus seek the indulgence of this Honorable court to exercise its discretion in favour of the Applicants.

Counsel for the applicants prayed that this Honorable court finds that the balance of convenience lies with the applicants.

That this application was brought within time; it was instituted immediately upon denial by the trial court granting the application for stay of execution pending

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- 5 determination of Civil Appeal No. 136 of 2019 vide Misc. Applic. No. 213 of 2021 which ruling was delivered on 12th September, 2022 and this application filed before this Honorable court on 30th September, 2022, the applicants having gotten to know about the ruling of court on 29th September, 2022 since there was no service of the ruling notice upon them. - 10 Furthermore execution of the decree had not been effected as per the mode of execution that the respondent had sought to execute.

Counsel for the applicants conclusively prayed that this Honorable court finds that there are sufficient grounds to warrant grant application and stay execution of the Decree in HCCS No. 333 of 2015 pending the determination of Civil Appeal No. 136 of 2019.

That the costs are well articulated under Sec. 27 of the Civil Procedure Act Cap 71 and the result is that costs follow the event and of course it's subject to the discretion of court.

The applicants counsel conclusively prayed that this honorable court finds that the applicants have fulfilled the considerations for grant of this application and 20 accordingly stay execution of the Decree in HCCS No. 333 of 2015 pending determination of Civil Appeal No. 136 of 2019 with costs in the cause.

In response, the respondent submitted that Rule 6(2) (b) of the Court of Appeal Rules Directions empowers this Court to issue Orders of Stay of Execution on such 25 terms as the Court may think just. It states;

> "Suspension of sentence and stay of execution. Subject to subrule (1) of this rule, the institution of an Appeal shall not operate to suspend any sentence or to stay execution, but the Court may in any civil proceedings, where a notice of Appeal has been lodged in accordance with rule 76 of these Rules, Order a stay of execution, an injunction, or a stay of proceedings on such terms as the Court may think just."

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It follows therefore that the Court's powers to grant such orders is discretionary and if the Court is inclined to grant such orders, it does so upon such terms which are likewise at its discretion.

$9$ | Page Counsel for the respondent referred to the case of Editor in Chief the New Vision $\mathsf{S}$ Newspaper vs. Justice Herbert Ntabgoba, Civil Application No. 63 of 2004 this Honourable Court held as hereunder;

"As regards the criterion which this court applies when exercising its discretion to grant a stay of execution, the Supreme Court made it clear in Francis Sembuya (Supra) when it said;

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"The criterion of stay of execution is well settle. It is to be found in a number of decided cases including Kampala City Council vs. National Pharmacy Ltd (1979) 215 And Somali Democratic Republic Vs. Anoop Sunderial Treon, Civil Appeal No. 11 of 1998, (Supreme Court). In Both cases, it was held by this Court that a stay of execution pending Appeal under Rule 5(2) (b) can only be granted if there are special circumstances and good cause to justify such a course. Short of that test, the Court will not be persuaded to grant a stay of execution"

The court, therefore, can only grant a stay of execution if there are special circumstances and good cause to justify that course. Such things as likelihood of 20 the intended Appeal succeeding and willingness of the Applicant to deposit security for due performance of the decree of order are not legal requirement in this Court for consideration whether or not to grant a stay of execution"

In the more recent case of *China Henan International Cooperation Ltd Vs. Justus* 25 Kyabahwa Court of Appeal Civil Application No. 100 of 2021, this court held that;

"For an application in this court for a stay of execution to succeed, the applicant must first show that he/she has lodged a notice of appeal in accordance with rule 72 of the Rules of this court. The most often cited authority in an application of this kind is Lawrence Musiitwa Kyazze Vs Eunice Busingye, Civil Application No. 18 of 1990, in which the Supreme Court held that:

"Parties asking for a stay should meet conditions like:

(1) That substantial loss may result to the applicant unless the order is made.

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(2) That the application has been made without unreasonable delay. 35

(3) That the applicant has given security for due performance of the decree or $\mathcal{S}$ order as may ultimately be binding upon him.

Counsel for the respondent cited the decision of Hon. Theodore Ssekikubo & Others vs. The Attorney General and Another, Constitutional Application No 06 of 2013 the Supreme Court re-stated the principles to consider before granting an

order of stay of execution pending appeal and these include;

- 1. It must be established that the applicant will suffer irreparable damage or that the appeal will be rendered nugatory if a stay is not granted. - 2. The application must establish that the appeal has a likelihood of success; or a prima facie case of his right to appeal. - 3. If 1 and 2 above has not been established, Court must consider where the 15 balance of convenience lies. - 4. That the applicant must also establish that the application was instituted without delay".

The respondent's counsel argued that the application discloses no special circumstances or good cause for the court to exercise its discretion by granting $20$ the application, and on the peculiar facts of this case, what is just and equitable is to refuse to grant the Order of stay and this is based on special circumstances of the applicants' antecedents set out in 1.9 above. For ease of reference, they are;

(a) The $1^{st}$ applicant has structured his affairs to immunize his assets from attachment and/or recovery by financial institutions as evinced hereunder; $25$

- The $1^{st}$ applicant obtained loans from the respondent pledging the $(i)$ property comprised in Block 221 Plot 1965 land at Nalyako to it and upon default being made, he connived with his other wife Rehema Ssebagala to file a suit vide Civil Suit No. 255 of 2014 Rehema Ssebagala Vs. Mohammed Ssebagala & Diamond Trust Bank Limited seeking for cancellation of the mortgage deed contending that spousal consent had not been obtained: - The 1st applicant obtained a loan from Stanbic Bank for which he $(ii)$ pledged the property comprised in Block 250 Plot 514 land at Bunga. Upon the Bank commencing foreclosure action his other wife $\varsigma m$ $11$ | Page

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Namayanja Mariam Kiwanuka filed a suit vide Civil Suit (Land Division) No. 591 of 2013 Namayanja Mariam Kiwanuka vs. Stanbic Bank & Mohammed Ssebagala seeking for cancellation of the mortgage on the basis of lack of spousal consent.

- (b) In both suits the $2^{nd}$ applicant as wife to the $1^{st}$ applicant had signed off the - $10$

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- spousal consent consenting to the pledging of the property well knowing that neither of them was her residence. - (c) That in the judgment of High Court in (Land Division) Civil Suit No. 591 of 2013 (details set out in paragraph 1.6(ii) above), the Court expressly made a finding that the 1st applicant was not honest in his dealings with Stanbic Bank - in respect of the suit property which was the residence of his other wife, $15$ Namayanja Mariam Kiwanuka, and to date his finding has not been set aside on appeal;

That the applicants' antecedents are a bad attempt at making a mockery of the justice system. This should not be condoned by this Honorable Court.

- 20 Counsel submitted that the respondent has on the other hand indicated special circumstances to warrant the refusal of the Order of stay. In paragraph 11 of the affidavit in reply, Ms. Nazziwa depones that the respondent would in the unlikely event of the appeal being successful be in a position to refund any monies that would have been paid in settlement of the decretal amounts. - 25 In the case of Justice Herbert Ntabgoba (Supra) their Lordships stated as hereunder:

"However, inability of the victorious party to be able to refund the decretal amount in the event of a successful Appeal if proved, constitutes, a special circumstance which justifies grant of a stay of execution. The burden to prove this on the Applicant who wants the Court to believe that the victorious party is no likely to be able to refund the decretal amount in the event of successful appeal. This Is in terms of Section 102 of the evidence Act which provides:-

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"the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence unless it is provided by any other law that the proof of that fact shall lie on any particular person"

Counsel noted that in light of the applicants' antecedents, they do not come to court with clean hands and additionally no special circumstances are set out to warrant the issuance of an Order of stay of execution. On that basis they pray that this Court be pleased to dismiss this Application with costs.

The respondent's counsel contended that the applicants make reference to the prospects of success of the appeal and the payment of Ugx. 200,000/= (Uganda Shillings Two Hundred Thousand only) as security for costs and although the

Justice Herbert Ntabgoba case ((supra) states that these are not grounds for $15$ consideration for a grant of a stay of execution in the Court of Appeal, the China Henan case (supra) indicates that they are and accordingly we shall briefly submit on them.

That although ground 1 of the Appeal is in our view poorly framed, the $1^{st}$ applicant's principal contention in the appeal is that he repaid the money, 20 borrowed from the respondent. The basis of this contention is twofold, firstly, that he made deposits in settlement of the debt, and secondly, that the proceeds of his sale of the property comprised in LRV 4196 Folio 2 Plot 57A Enterprise Road (PEX7 pg 0215 of the Record of Appeal) to one Hood Sentongo were appropriated

25 towards settlement of the amounts owed and secondly that he made deposits towards clearing of the debt.

Counsel for the respondent submitted that at the trial, all the 1st applicant relied on was an agreement pursuant to which he purportedly sold property to Hood Sentongo. No evidence of deposit of the purchase price onto the $1st$ applicant's

account was tendered into evidence. It is also instructive to note that whereas it 30 was a term of the agreement that Hood Sentongo's purchase was to be financed by the $1st$ respondent, the respondent was neither a party nor a signatory to this agreement (Clause 1.3 of the Agreement). DW1's uncontroverted evidence was that Hood Sentongo was not a customer to the respondent, he never applied for

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5 any loan and no loan was ever granted to him. DW1 also confirmed that the Bank received no money from Hood Sentongo.

In relation to the deposits on the account, although deposits were indeed made, the 1st applicant would also make withdrawals and in any event there was no evidence of full payment of the debt sum and on the contrary, the Statement of

10 Account on which the 1st applicant relied to assert having deposited money, likewise reflected the amounts owed.

That the applicants also framed a ground on unconscionable interest but in DW2's cross examination, he was asked whether any interest was charged contrary to what had been agreed on and he failed to confirm this as having been the case.

DW2's evidence on this is set out at pages 177 to 179 of the Record of Appeal. It's $15$ reproduced for the Courts ease of reference.

Clearly the ground of unconscionable interest has no prospects of success as no evidence in relation to it was tendered at the trial.

It is accordingly the respondent's submission that there are no prospects of 20 success of the appeal

Although the applicants contend that they have provided security for due performance of the decree by way of payment of costs of a sum of Ugx. 200,000/= (Uganda Shillings Two Hundred Thousand only), this is false as this sum relates to the mandatory security for costs of the appeal paid pursuant to Rule (1)

25 (d) of the Court of Appeal Rules Directions and not security for due performance of the decree.

Counsel for the respondent stated that if the Court is inclined to exercise its discretion to allow this application it should do so upon such terms as to the applicants providing security for the due performance decree, and a deposit of

30 the entire decretal sum and taxed costs in Court would in the circumstances of this case be appropriate.

The respondent prayed that this Court be pleased to dismiss this application with costs. $\zeta_m$

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## **5** Consideration of Court / Analysis

The granting of an order for a stay of execution pending appeal is a discretionary power of the Court of Appeal, exercised under Rule 6(2) (b) of the Judicature (Court of Appeal Rules) Directions S. I 13-10;

Subject to sub rule (1) of this rule, the institution of an appeal shall not operate to suspend any sentence or to stay execution, but the court may-

## 2(b) in any civil proceedings, where a notice of appeal has been lodged in accordance with rule 76 of these Rules, order a stay of execution, an injunction, or a stay of proceedings on such terms as the court may think just

The primary purpose of granting a stay is to preserve the status quo and ensure 15 that the appellant's right of appeal is safeguarded so that if the appeal is successful, it's not rendered nugatory.

In Lawrence Musiitwa Kyazze v Eunice Busingye, SCCA No. 18 of 1990, it was held that this Court can entertain such an application in order to safe guard the right of appeal although the applicant has to prove special circumstances.

- 20 For an application for a stay of execution to succeed, the applicant must generally satisfy several conditions, which have been highlighted in several precedents, these include; - a) The applicant must show that he lodged a notice of appeal - b) That substantial loss may result to the applicant unless the stay of execution is granted. - $25$ - c) That the application has been made without unreasonable delay.

d) That the applicant has given security for due performance of the decree or order has it may ultimately be binding upon him. See Hon Theodore Ssekikubo and Ors v The Attorney General and Ors Constitutional Application No. 03 of 2014

On whether the applicants have satisfied the requirements, that assessment is determined by this court in line with the above mentioned conditions.

In the instant case the applicants asserted they had preferred an appeal (Civil Appeal No. 136 of 2019) and that it was at an advanced stage, with the

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5 Memorandum of Appeal already lodged and conferencing concluded. Their counsel confirmed the consideration of lodgment of the Notice of Appeal was fulfilled. This is a foundational requirement.

They also claimed the court failed to consider their defense of loan servicing and a tri-partite agreement. They concluded there were high chances of success.

thereafter.

The applicants argued that execution of a decree exceeding Ugx 800,000,000/= against individuals would cause hardship and loss. They particularly emphasized that if execution involved arrest and detention, no amount of damage could atone for the substantial loss if the appeal succeeded, rendering the appeal 15 nugatory.

The applicants stated this specific application was brought within time, filed on 30th /September /2022, immediately after the High Court denied their previous application for stay on 12th / September/ 2022, with applicants learning of the 20 ruling on 29th / September/ 2022.

Furthermore, the appeal itself raises serious questions of law and fact that merit the court's consideration, signifying a strong likelihood of success a prima facie case of their right to appeal. Specifically, the appeal challenges the trial court's alleged error in declaring a Ugx 400,000,000/= debt without a clear mathematical

25 explanation, especially when the respondent's initial claim was significantly lower Ugx 43,913,976/ $=$ .

The respondent's counsel has argued vehemently that the appellants have no merit and their claims are frivolous. It would be wrong for this court on an application for stay of execution pending appeal to say anything that indicates a concluded view as to the merits of the action, on fact or law, because the ruling is 30 the subject matter of the appeal and will have to be heard and dealt with

The appellants also contend that their defense of loan servicing was not adequately considered, despite evidence being led on this, and that the tri-partite

agreement concerning Hood Sentongo was disregarded. These are not vexatious 35 grounds but substantive issues that, if upheld on appeal, would entirely alter the judgment.

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- 5 The respondent has submitted that the judgment debt is now in excess of Ugx 1,028,000,000 /= as of February 2023. This is a huge sum which would prejudice the applicants in terms of attachment of several properties to satisfy and yet there is an arguable appeal premised on non-consideration of servicing the said loan. Whilst it is true that the court does not make a practice of depriving a successful - litigant of the fruits of his litigation and locking up funds to which primo facie he is entitled to pending an appeal, it is equally true that when a party ls appealing, exercising their undoubted right of appeal, if successful, is not rendered nugatory but it is however in the discretion of the cou rt to grant or refuse a stay. See Swonyo Ltd v Doima Bonk Ltd Noirobi Court of Appeol Civil Applicotion No.45 ol 2001 10 - Whereas the respondent is a bank and has the financial means to refund the decretal sum should the appeal succeed is not invariably decisive since what may render the success of an appeal nugatory must be considered within the circumstances of each particular case. The amount to be recovered is huge and would definitely impact the applicants once their property is sold in recovery or 15 - they are arrested in execution. See Reliance Bank Ltd Norlake lnvestments Ltd [2002] 1 EA 227 20

Therefore, the refusal to grant an order of stay would cause the applicant such hardship as would be out of proportion to any suffering a respondent might undergo while awaiting the hearing of an appeal. This court would accept that as a factor amounting to rendering the success in the pending appeal nugatory.

ln light of the foregoing, this court finds that the applicants have satisfied the conditions for tlre grant of a stay of execution pending the hearing and determination of Civil Appeal No. 136 of 2019.

Costs shall be in the cause.

30 I so order

7L DATED at Kampala this day of 2025

M SSEKAANA 35 JUSTICE OF APPEAL

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