National Housing and Construction Corporation v Kampala District Land Board and Another (Civil Application 6 of 2001) [2002] UGSC 45 (25 November 2002)

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## REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT MENGO

(CORAM: ODER. TSEKOOKO. KAROKORA, MULENGA AND KENYEIHAMBA, JJ. SC.)

## CIVIL APPLICATION NO. 6 OF 2001

## **BETWEEN**

NATIONAL HOUSING & CONSTRUCTION CORPORATION ---- APPLICANT

AND

KAMPALA DISTRICT LAND BOARD)

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2. CHEMICAL DISTRIBUTORS LTD.) ---------------------- RESPONDENTS

[Application for stay of Execution, An Injuction and or stay of Proceedings arising from Ruling of Court of Appeal at Kampala (Kato, Twinomujuni and Kitumba J. J. A) dated 9<sup>th</sup> January 2002 Civ. Application No.87 of $2001$

RULING OF THE COURT: National Housing and Construction Corporation (NHCC), the applicant, instituted an application by notice of motion under Rules 1(3), 5(2)(b), 40 and 41 of the Rules of this Court against Kampala District Land Board, the first respondent, and Chemical Distributors Ltd., the second respondent. By the application, the applicant seeks orders for stay of execution, an injunction and a stay of proceedings to issue against the two respondents, in effect, to restrain them, from disposing of or developing a piece of land described as Plot 4

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Luthuli Second Close, Bugolobi, registered in Land Registry under LRV 2860 Folio 20 (hereinafter referred to as "the suit land"). The application also seeks for an order to prevent taxation or recovery of costs awarded to the Respondents first by the High Court in HCCS NO.428 of 2001 and later by the Court of Appeal in Court of Appeal Civil Application No.87 of 2001.

When the notice of motion was called for hearing, Mr. Nerima, counsel for the first respondent, objected to the competence of the application on the ground that we have no jurisdiction to hear this application. Counsel for the second respondent supported the objection.

It is desirable to give the background from which the application arose. The applicant is a construction parastatal Corporation. It has a lease over an estate of land in Bugolobi, a suburb of Kampala, known as Bugolobi flats. Apparently in the middle of the estate is the suit land formerly known as Plot M.597 to which residents of the flats have or had access for recreation purposes. In 1999, however, the first respondent leased to the 2<sup>nd</sup> Respondent the said suit land which was thereupon registered in the Land Registry under LRV.2860 Folio 20, as Plot 4 Luthuli Second Close, Bugolobi. Because the applicant claimed that the said lease was fraudulent, it instituted a suit in the High Court against the two respondents seeking an order to have the lease cancelled. The suit was dismissed with costs. The applicant filed a notice of appeal intending to appeal to the Court of Appeal against the decision of the High Court. Meantime the applicant unsuccessfully applied for stay of execution first in the High Court and later in the Court of Appeal. Being dissatisfied with the decision of the Court of Appeal dismissing the application for stay of execution, the applicant gave notice of appeal intending to appeal to this Court against that dismissal. It was thereafter

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that the applicant filed the notice of motion in this Court applying for stay of execution, an injunction and stay of proceedings.

Mr. Nerima, Counsel for the 1<sup>st</sup> Respondent, submitted that this Court could entertain the application only if there was an intended appeal allowed by law, but that in the present application, the applicant has no right of appeal against the ruling of the Court of Appeal dismissing its application for stay of execution of the High Court judgment. Learned counsel relied on Article 132(2) of the Constitution which provides that an appeal lies to this Court from the decision of the Court of Appeal as may be prescribed by law. He cited S.7(1) of the Judicature Statue, 1996, which prescribes that appeals to this Court shall be from the decisions of the Court of Appeal where that Court confirms, varies or reverses a judgment or order of the High Court. He contended that by dismissing the application for stay of execution, the Court of Appeal did not confirm, vary or reverse any judgment or order of the High Court. He also contended that there is no right of appeal to this Court from the Court of Appeal where that Court makes orders in its original jurisdiction except in Constitutional cases and relied on Rule 5(2)(b) of the Rules of this Court. He also argued that his client's failure to invoke Rule 77 which provides for striking out an incompetent notice of appeal cannot clothe this Court with jurisdiction to entertain the application. In counsel's view, the application is misconceived and on the authority of Attorney-General Vs Shah (No.4) (1971) EA.50, this Court has no inherent jurisdiction because the appellate jurisdiction of this Court is only created by Statute and that Rule 1(2) of the Rules of this Court presupposes that those Rules apply where there is a right of appeal. (We think that reference to Rule 1(2) must have been inadvertent.) Messrs. Muhimbura and Ojiambo, counsel for the second Respondent, associated themselves with the submissions of Mr Nerima, adding that the

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respondents were not barred from raising the objection by virtue of rule 97(b) of the Rules of the Court because no appeal has been lodged.

We would observe in connection with the last argument that reference to Rule 97(b) is misconceived because we were not hearing an appeal when the objection now under consideration was raised.

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Mr. Peter Walubiri, counsel for the applicant, opposed the objection made on behalf of the Respondents. He submitted that the applicant has a right of appeal under S.7(1) of the Judicature Statute and that under Rule 5(2)(b) of the Rules of the Court we have jurisdiction to hear the application. He further contended that Rule 1(3) of the Rules of this Court overrides all other Rules and gives this Court inherent power to do justice. Mr. Walubiri argued that the objection raised, and now the subject of this ruling, should be considered in the context of the reality of the dispute between the parties. He then pointed out that the applicant instituted a suit in the High Court against the respondents to recover the suit land which had been wrongly leased by the first respondent to the second respondent. Counsel further pointed out that the applicant had occupied the suit land since 1970 with the consent of Kampala City Council and that, therefore, the applicant is a lessee, customary tenant or a bona fide occupant of the suit land. Counsel further pointed out that when the High Court dismissed the suit, the applicant filed notice of appeal to the Court of Appeal, upon its application for stay of execution being dismissed by the Court, it filed notice of appeal under rule 71. That notice is still on the record and the respondents have not sought, under rule 77, for an order to strike it out. He contended that by virtue of rule 97(b) the competence of an appeal can be challenged only under rule 77. He pointed out that the purpose of the application for stay or injunction or stay of proceedings is to preserve the status quo, so that if the appeal is successful, it should not be rendered nugatory. He argued

that under ArL726 (2)(Q and (€/ of the Constitution, courts administer substantive justice. Learned counsel submitted that Strch ccse (supral was decided on its own facts and that the Civil procedure Act does not apply to the present proceedings but if that Act applies then it applies in favour of the applicant. Learned counsel ciled L.fil. Kgozze Vs. D. &tstngge Supreme Court Civil Application 18 of 1990, F. Semhuga Vs. All Ports Mght Senrices - Supreme Court Civil Application No. l5 of <sup>1998</sup>and Sona'll Dernocrttlc Repr}ltc Vs. Anoop Sunderlal Tleon - Supreme Court Civil Application No. ll of lggg to show that in the pasr this Court exercised its appropriate cases. discretion to grant stay of execution in

As we see it, the issue for our determination is whether this court has power to entertaining the application for stay of execution, injunction and or stay of proceedi;,gs. The provisions of paragraph (b) of Subrule (2) of Rule 5 are clear. They state as follows, so-far as is relevant:

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"2 Subject to subrule (lf the institution of au appeal shall [ot operate to stay executlou but the Court may-

(b) In Civil Pttceedings, whete a notice oJ appeal ha-s been lodged in accord.ance utith rulc 77, order a stog oJ executiott, an injunctiona or a stay oJ proceedings o-s the Court ,rr,og cort-sid.er ju-st..

lt is clear from the above provisions that the limitation placed on this court's exercise of its discretion to gran t stay of execution, an injunction or sta-v of proceedings, is that there should be a notice of appeal liied under Rule 7l of the Rules of this court. Mr. Nerima's main contention, however, is that even if there is such a Notice o[ Appeal, thts Court

should apparently go into the merits of the intended appeal and ascertain that the intended appeal would be competent. This is not the ratio decedendi of the decision of Barclays Bank of Uganda Ltd. Vs G. Mubiru Supreme Court. Civil Application No.9 of 1997 (unreported) in which counsel for the respondent in that application wanted the Court, in granting the application for stay of the decree, to impose conditions for performance of the decree. This Court said that all that is required for the exercise of the Court's discretion under Rule 5(2)(b) as a precondition, is that a Notice of Appeal has been filed.

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It is common ground that the applicant lodged in the Court of Appeal a Notice of Appeal following the decision of that Court on 9/1/2002, dismissing the applicant's application for stay of execution. In the affidavit filed in this Court supporting the notice of motion, the applicant claims that the dismissal of the application for stay by the Court of Appeal was wrong in law. Clearly the merits of the pending application will be investigated when the application itself is heard. We cannot go into its merits or demerits now. The fact of the matter is that a Notice of Appeal as envisaged by Rule 71 has been filed. It is on the record. The respondents have not challenged its validity under Rule 77. The Respondents appear to suggest that that step is unnecessary at this stage. The respondents have not given sound reasons to support that suggestion. They simply contend that we have no powers to hear the pending application because it is incompetent. We do not agree.

According to Rule 71(l), any person who desires to appeal to this Court shall give notice in writing, which shall be lodged in duplicate with the registrar of the Court of Appeal. There is no suggestion that the notice of appeal which was given by the applicant is defective. In our considered view, the issue of the competence of the notice of appeal would be appropriately determined upon an application made under rule 77

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challenging the validity of the Notice of Appeal, and, in the absence of such application, the application for stay of execution, an injunction or stay of proceedings is properly before us.

Mr. Walubiri cited three decisions, two of them decided by this Court, to support his argument that in the past, this Court has exercised its discretion and granted stay of execution. Of course, each application is decided on its own facts. Moreover those decisions are particularly relevant to the issue of merits of an application for stay but not to an issue of the competence of an application itself.

In the present application, Peter K. Musoke, the applicant's Corporation Secretary, in an affidavit sworn on 11/2/2002, averred that the lease of the property to the second Respondent was fraudulently granted. We are of course not concerned with the merits of the intended appeal nor that of the substantive application. The intended appeal has first to be argued in the Court of Appeal. But a claim of fraud is a serious allegation that might possibly be justification for the appellate court to review the judgment of the High Court. That review cannot be pre-empted by our consideration of probable merits of the intended appeal. Further in the ruling dismissing the application in the Court of Appeal, that court held that:

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"We do not agree with counsel for the applicant that a dismissal of the suit in the High Court had an automatic effect of removing the caveat. The High Court did not order the removal of the caveat and therefore the caveat remains valid till it is removed either at the request of applicant or by Court order".

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That statement raises arguable matters which might create a right of appeal. We find no need to consider whether or not sections 68 and 74 of CPA are or are not against the applicant, precisely because we are not considering any appeal before us.

Reviewing the arguments presented in the preliminary objection to the intended application and the reply thereto, we are not persuaded that we have no jurisdiction to hear the application. We do under *rule 5(2)(b)* of the Rules of this Court. We see no need to further consider the import of rule 1(3).

In the result we think that the objection has no merit and the same is overruled. We order for the hearing of the substantive notice of motion to proceed. The costs occasioned by the objection shall be in the cause.

: $\mathcal{W}_{\mathcal{A}a}$ *ovaulog* Deliverer at Mengo this 2002.

A. H. O. ODER

JUSTICE OF THE SUPREME COURT.

J. W. W. TSEKOOKO JUSTICE OF THE SUPREME COURT.

A. N. KÀROKORA

JUSTICE OF THE SUPREME COURT.

J. N. MULENGA JUSTICE OF THE SUPREME COURT.

KANYEIHAMBA $\mathbf{w}$

STICE OF THE SUPREME COURT

this vered

Wing under Rule 31(8) $\mathcal{R}$