Reamaton Ltd v Uganda Corporation Creameries Ltd (Civil Application 7 of 2000) [2000] UGSC 29 (17 October 2000)

Full Case Text

"Further Seccenty for Cords Rule 1003 Rules DS. de S. 404 of Co's Act ave no bulstantial pooty. REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT MENGO

J. W. N. TSEKOOKO, JSC) (CORAM:

## $NO. 7$ CIVIL APPLICATION $of$ 2000

## **BETWEEN**

REAMATON Ltd.::::::::::::::::::::::::::::::::::::

AND

CORPORATION CREAMERIES Ltd.) 1. UGANDA HENRY KAWALYA) ):::::::: RESPONDENTS

(An Application for further security for costs arising from Civil Appeal No. 2 of 2000).

## **RULING:**

The present respondents are the appellants in Civil Appeal No. $2/2000$ which is an appeal to this court from the decision of the Court of Appeal. The present applicant is the respondent in that appeal. I will hereinafter refer to the parties as the applicant and the first respondent and the second respondents respectively.

The respondents deposited in the registry of the Court Shs. $400,000/$ = as statutory deposit of security for costs as required by the Rules of the Court. The applicant considers that on the facts of these proceedings, that statutory deposit is inadequate. It has therefore brought this application by notice on motion under Rule 100 (3) of the Rules of the Court and section 404 of the Companies Act, praying for an order that the respondents do furnish security for further costs, for past costs and costs of Civil Appeal No. 2 of 2000.

The general background to this application has been set out in the affidavit supporting the application. The applicant sued the respondents in the High Court (Civil

$\mathbf{1}$

suit 738/95) seeking to recover US\$365,000, being a total refinancing loan to purchase the respondents' coffee. The applicant obtained a preliminary judgement for US\$211,200 because the respondents admitted this sum. There after a trial was held in the High Court. At the conclusion of the trial, the trial judge gave a decree in favour of the applicant for the total sum, as claimed, of US\$365,500/: with interest and costs. Subsequently the respondents instituted an appeal to the Court of Appeal against the decision of the High Court in respect of the whole final judgment of the High Court. At the instance of the applicant, the Coun of Appeal struck out the notice of Appeal. The Court of Appeal condemned the respondents to pay costs to the applicant. Eventually the respondents lodged an appeal to this coun against the ruling ofthe Coun of Appeal. The validity ofthat appeal to this Court is being questioned by the applicant on grounds that it has no chance of success. The respondents as earlier stated deposited Shs.400,000/= as statutory security for costs. The applicant argues, however, that this amount is too low. lt now asks that the respondents should be ordered to pay Shs. l50m/= as funher security for costs.

The applicant listed nine grounds [(a) to (i)] in the notice of motion. Mr. Babigumira, Counsel for the applicant. argued ground (a) to (d) first. These flour grounds state as follows:-

- (a) The applicant obtain (sic) judgment in the High Court against the respondents in the sum ofUS\$360,000 (sic) with interest at 2570 from the time of filing until the date ofjudgment, US\$211,200 being an amount entered on admission and there was no appeal against that sum so entered. - (b) That the respondents' Appeal has no slightest probability ofsuccess. - (c) The applicant has been put to undue expenses in defending proceedings filed by the respondents haphazardly/recklessly and or in abuse ofCourt Process. - (d) The respondents' numerous haphazard/reckless proceedings have resulted in heary costs which have been tared and allowed and more yet to be taxed but no cent has been paid towards the taxed and allowed costs

As will be seen later, the contents of ground (d) are not quite accurate because some payments were made albeit intermittently and through coercive procedures.

Mr. Babigumira, concedes that his client bears the burden of satisfuing me that it is proper for me to make the order his client is now seeking. His client cannot merely aver in the motion and or the atldavit that security already deposited for costs is inadequate. A. S. Patel Vs. American ExDress lnlernational Banking Corp. Sup.-Coun Civil Appeal No 9 of 1989 (unreponed) is to that eflect

In his submissions Mr. Babigumira relied on the affidavit of Mr. Mwebembezi, an advocate in their firm, and contends that Shs.27,574,584/= taxed and allowed in the High Court remain unpaid (see paragraphs l3 and 17 of the affidavit (inlia). He funher contends that Shs.27,447,000/: the amount taxed and allowed on Bills of costs in the Court of Appeal remains unpaid. He argued that Court of Appeal Civil Appeal No. 44 of 1999 has no probability of success because the order of a single Justice of Appeal who gave leave to appeal has since been set aside by the full Court ofAppeal as a result ofa reference to lhat Court. Counsel anticipates costs of at leasl Shs.2Om/= Iiom that reference and not less than 30m/= in respect of the present application together with the pending appeal (Supreme Court Civil Appeal No.2/2000) So he has asked me to order the respondents to deposit further security in the sum of shs. l50m/=. Mr. Babigumira cited G. M. Combined vs. A. K. Deter-qents Supreme Court, Civil Appeal No. i4 of 1995 reported in Supreme Coun Civil Appeal Judgments ( 1996) in suppon.

Mr. Kihika. Counsel for the respondents, submitted that G. M. Combined case (Supra) is distinguishable. On this point I agree with Mr. Kihika because G. M. Combined was decided under O.23 Rule I of Civil Procedure Rules and 5.404 of Companies Act in the High Court. Those two provisions and that case are relevant in instances of seeking for Security for costs during trial stage. The fl)ent application was made under Rule 100(3) otthe Supreme Coun Rules in this couri4ending an appeal.

O.23 Rule I reads Rs follows -

" l he ('ourt may if it deem.s.fit order a plaintiff in arty .suit to give seutrity.for the palmefit tf all costs incurred h1' any de.fendont"

And 5.404 of the Companies Act reads as follows:-

"ll'here a limited compon-t is plamttfl m arry suit or other ltgal prureeding, an.y .1uclge ho'ittg .jurixlictittn in the matter ma.t, if rt ctppeo's b.l credihla teslinro -\' lhul lhere is reasotr to helieye thot the companl'v ill ha unahle to pat' lhe costs of the dqferulant il:;uccessful in his defence, require su.flicient sec rit)'lo he given.fttr thtxe uxt and may stol'oll proceedirtgs unlil the searil)'is give ."

Rule 100(3) ofthe Rules ofthe court is produced later in this ruling but that subrule shows that a court exercises discrelion to order for funher security for costs pending an appeal.

Both counsel in this application agree that in this application the applicant bears the burden to prove that further security should be given. Mr. Kihika argues that the duty of the respondents is to simply show cause why relief should not be granted. Learned Counsel cited N M. Abdulla vs R Patel ( 1962) EA 447 where Rule 60 of the 1954 East African Court of Appeal Rules was considered. That rule is similar to the present Rule 100(3). Learned counsel argued that security for costs can be given only for matters before the court but not for what he called extraneous matters which, according to counsel, paragraph l7(l ) to (iii) (c) of Mwebembezi's aflidavit is about. Counsel attacked paragraph 19 of Mwebembezi's affidavit and ground (d) in the notice of motion contending that the inflormation contained there to the effect that no costs had been paid is false because his client has so lar paid Shs.30,463,000/= which amount had been acknowledged in paragraph 6 of Mwebembesi's supplementary aflidavit. Mr. Kihika referred to the affrdavit of Mrs. Kata where Mrs. Kata indicated that some payments had been made and that three vehicles belonging to the respondents had been attached and sold but that the proceeds of sale had not been accounted for by the applicant. Mr. Kihika relied on Abdulla's case (supra) and Bitaitana Vs Kananura (1977) HCB 34 for the view

that because of lies in para t 7 of Mwebemb6J{s affidavit, the apptication should be refused.

Kananura case. is a High Court decision. I have only read its digest in the High Court Bulletin. I have not seen the full judgment or the affrdavit sworn in suppon of the application in that case. I do not agree that every inconsistency in an affidavit will always inevitably be fatal to any application, which the affidavit supports. Each application and each affidavit will be treated on its own merits. Obviously an inconsistency or falsehood in an affidavit, unless corrected, which goes to the root ofthe application, will have serious consequences including the dismissal of the application. In the English decision of The Nordglimt ( 1988) 2 All E. R 53 I Hobhouse, J., held that where an untrue or inaccurate statement is made in an affidavit mistakenly and is produced in coun, the untruth or inaccuracy can be cured by lrank disclosure and prompt correction. See also Mvers Vs. Elman ( 1940) A. C. 282.

Like oral evidence. and subjected to what I have just state}an affidavit can be relied on even if a paragraph which is severable is found to be inaccurate: See M. B. Nandala Vs Father Lvding M. B. No. 77163 (HCCS No. 19 of 1963) Definitely a deliberate falsehood in an affrdavit will vitiate its value. In the present application, having regard to para 6 of the supplementary affrdavit sworn by Mwebembezi and the answers given by Mrs. Kata when she was cross- examined on her affidavit, it is clear that some cheques deposited by the respondents were dishonoured and arrangements were subsequently made to make replacements. Moreover I do not think. bearing the facts before me in mind, that the alleged inaccuracy or misslatement in Mwebembezi's affidavits is a deliberate falsehood. lndeed in para 6 in the supplementary affidavit, Mr. Mwebembezi accepts that some payments were made.

On the probability ofsuccess olthe appeal. Mr. Kihika argued that at this stage, I am not required to go into the detailed merits of the appeal. That Mrs. Kata's affidavit shows that a notice of Appeal as well as the memorandum of appeal have been filed challenging the decision of the Court of Appeal because that court failed to take into account cenain relevant matters when it decided not to grant extension oltime.

Initially, Mr. Babigumira made written submissions. I granted him leave to orally reply lo the issues raised by Mr. Kihika. He explained that ground (d) in the notice of motion refers to the harpharzad and reckless manner in which proceedings in the High Court and in the Coun of Appeal were filed by the respondents. On extraneous matters, he argued that all the matters raised by the application are relevant as they arise from execution proceedings, which sprung from the original civil suit. On payment of shs.30m/= Mr. Babigumira pointed out that the supplementary affrdavit by Mwebembezi sworn on 71712000 (especially paragraph 6 thereofl explains the payments referred to by Mr. Kihika The supplementary affidavit also explained how the three vehicles, which were attached, were wrecks, attracting no value.

Mr. Babigumira contended that the affidavit of Mrs. Kata is irrelevant and should not be relied on because she is merely an employee ofthe first respondent; but is neither a director of, nor a shareholder in, the first respondent. So she can not swear an affidavit in opposition like a pany to the proceedings. Learned counsel also argued that because the shares of the first respondent have been sold and have changed hands, and its directors have changed and the second respondent is outside Uganda on an indefinite course of study apparently avoiding arrest warrants issued by the courts below, this is a case in which I should grant an order for further security lor costs as prayed for.

I will first dispose of the relevancy of the affidavit sworn by Mrs Kata.

When Mr. Babigumira crossed-examined Mrs. Kata on her affidavit of 61712000, she agreed that she swore the affidavit as an olficer but not as director of the first respondent. She does not appear to know or could not remember the entire membership of,the current directors and or the shareholders ofthe first respondent. She testified under cross-examination that the respondents' assets now consist only of furniture and equipment in office. No value was placed on such furniture and equipment.

Surbrules (1) and (2) of Rule 47 of the Rules of the Court read as follows:-

"47(1) Any person served with a notice of motion under rule 46 may lodge one or more affidavits in reply and shall, as soon as practicable, serve a copy or copies on the applicant.

$(2)$ Any person referred to in Subrule $(1)$ may, with the leave of a judge or with the consent of the applicant, lodge one or more supplementary affidavits."

It does not seem to me that these provisions prohibit lodging of affidavit not sworn by a party. Mr. Babigumira supplied to me the cases of Masaba Vs Republic (1967) EA488 and Joy Kaingana per John Kaingana vs. Dabo Boubon (1986) HCB.59. In the Masaba case, which was an application by notice of motion supported by an affidavit, sworn not by Masaba himself but by a stranger named Danieri Kamoti. The application had been made by an individual (Masaba) and his relationship with the deponent Kamoti is not stated in the judgment, which says that Kamoti was a stranger to the proceedings. Sir Udo Udoma, CJ, rejected the affidavit because Kamoti was not a party to the application. But the learned Chief Justice would have accepted the affidavit if it had been "in corroboration of the affidavit sworn to by the applicant as the one directly affected". The learned Chief Justice did not give authority for his views. However in the absence of a copy of Kamoti's affidavit, I cannot say that Masaba case is helpful. Similarly in the Kainganga case, whose report is in a digest form, the affidavit of Mr. Kaingana, the husband of the applicant is not reproduced. The judge who heard the application relied on Order 5 Rule 2 of our CP Rules and held that although the deponent swore the affidavit in a representative capacity, there was no authority given to him by Joy Kaingana the applicant to show that he had been authorised to act for her. The learned judge also stated, correctly, that a person is competent to swear an affidavit on matters or facts he knows about or on information he receives and believes. In view of this statement by the judge and in absence of the full ruling, I do not think that Kaingana case is helpful. ln civil matters in the High Court the agents who can act for parties to proceedings are set out in order 3 rule 2 of the Civil Procedure Rules. These agents include advocates and persons holding powers of attomey. ln my view O.3 and O.5 appear to refer to agents who are to physically appear, or make applications or do some act in court. I do not think that the two Orders would prevent a witness from swearing an affidavit in suppon ofan application by a party to such application The affidavit ofsuch a witness would be objectionable on such grounds as where the affidavit contains hearsay matters and the deponent does not lay a proper foundation of hiVher knowledge of the facts upon which he/she depones.

In this matter it is instructive to read rule 42(l) of the Rules of this Court. By the Subrule,

"Ewry Jormal application b the cour! shall be b7' one or more affidat its of the applicant or of tume other person. or perytns having hpv'ledse of the facts". (I InderIining suppIied.)

Clearly this sub rule authorises any person other than the party to the application to swear an affidavit in support of a formal application to the court. The only condition attached is that the deponent should have knowledge of the facts. Now if an application can be supported by an affidavit ofa person other than the applicant, I cannot envisage a sound reason for saying that an affidavit in reply cannot be sworn to by a person other than the respondent. In the circumstances I rule that it is permissible to use Mrs. Kata's affidavit in reply to those sworn by Mwebembezi who is himself not a party. Mrs. Kata is a person who appears to have some knowledge of the facts to which she is deponing. Let me now revert to the application itself.

It is true and I agree with the pnnciple adopted in the Abdulla Vs. Patel case (Supra) that the applicant bears the burden ol satisfying me of the need to order the respondents to provide funher securily lor costs. I also agree that in general the grant of an order for further security for costs should not be made as a matter of course. All the

facts of each case must be considered judicially before such an order can be made or refused.

There are three points raised in grounds (a) to (d) of the notice of motion. The first arising from grounds (a) and (b) is the probability of success of the appeal and the second is the adequacy ofthe security for costs already given. This latter is based on the claim by the applicant that taxed costs have not been paid or perhaps not paid in full and thal there are yet more costs to be awarded to the applicant and that the respondents are unlikely to pay the costs awarded or to be awarded or both.

On the first point, namely whether there is or there is not a probability of success of the appeal, Mr. Babigumira has raised two arguments. He has argued that in the High Court a preliminary decree for US\$211,200 was entered lor the applicant on the admission of liability by respondents and that initially there was no appeal against that amount. He referred to various applications, which were filed and argued in High Court lI^ and^the Court of Appeal and which were dismissed. Mr. Babigumira's view therefore is that there is no probability of success ofthe appeal on US\$ 2l1,200. He cited authorities in support. Secondly, he says that the order of a single Justice of Appeal by which the Justice allowed the respondents to appeal against the whole judgment. was subsequently sel aside by the full Coun of Appeal. Therefore, says Mr. Babigumira, there is no chance of success ofthe pending appeal. Mr. Kihika did not directly challenge these argumenls. lnstead he contended that in her aflldavit, Mrs. Kata has sworn that a notice ofappeal and memorandum ofappeal were filed. Learned Counsel funher contended that at this stage, I should not go into the details ofthe merits ofthe appeal. He argues that even ground (d) contains falsehoods. I have dealt with falsehood. On merits, I agree with leamed counsel to the extent that I am now not hearing the appeal and so I am not required to consider the detailed merits ofthe appeal. But I think that the probability ofthe success ofthe appeal is a lactor to be born in mind together with the other factors. I notice that Mrs. Kata keeps on slating in her affidavit that "l am reliably informed by my advocates Byenkya, Kihika & Co. Advocates......." I think that this reference to the whole firm is bad and misleading. A panicular advocate should be mentioned. Besides it should be noted that Rule 42( l) refers to a person having knowledge ofthe facts.

Mr. Babigumira's submissions and the affidavit of Mwebembezi are based on lhe knowledge of the case by both Mr. Babigumira and Mwebembezi who have been handling the case. Ground (d) in the notice of motion and paragraph l9 in Mwebembezi's affidavit may be inaccurate when they alleged that the respondents are unable to pay taxed costs. However Mr. Mwebembezi in para 6 of his supplementary affrdavit, swom on 71712000, explained the confusion relating to the manner of the payments. Previous cheques issued by respondents were dishonoured. Some cheques were subsequently replaced by other cheques. Other cheques were replaced by cash. Mrs. Kata explained as much in her testimony during cross-examination on her affidavit. Mr. Babigumira made further explanation when he made oral submissions after the oral submissions of Mr Kihika. The impression I get from the submissions of the two counsel and the aflidavits is that payments ofthe costs have been problematic for the respondents.

The position ol this case is set out in Mwebembezi's supporting affidavit, I reproduce paragraphs 7 to l6 of Mwebembezi's affidavit and the reply of Mrs. Kata. At the risk of making a lengthy ruling, I shall reproduce these paragraphs.

## Mwebembezi's allidavit read as follows:-

- 7.(i) 'l HAT after the Notice of Appeal atd the Appeal irself had been struck ofl, v'e applied.for a \$'arra t of Attachment ancl sale of immorahle properry' bnt the Baliff to u'hom it u'a.s allocated.found o t lhcrt lhe land l-itle wasJake in thot it bebnged ru a different per.xtn alktgether u'ho had not gitzn any Pov'ers of Antrney. - (ii) THAT v'e even obtained a u'orrant of Auochment and sell qf motable propertl', v'hich include a Mercedes Benz of the 2nd Appellant, hut he hid it. - l'HA'l' in the meqt,time, the respondents.filed inthe (-ourt of Aplnal ('it,il Applicatiotts No. 33o[ 1998 and No. 3] of 1998 8.

For extension of time within which to Appeal against the Judgment Decree of the High Court but both were dismissed with costs by a single Judge.

$\cdot$

- 9. THAT instead of making reference to a full bench against the dismissal of the 2 applications, the respondents filed in the Court of Appeal Misc. Application No.144of 1998 for yet leave to appeal out of time, which gave rise to these proceedings. - THAT after failing to attach the land Title that had been 10. deposited in Court and the $2^{nd}$ respondent's Mercedes Benz, we applied to the High Court for a warrant of arrest against the $2^{nd}$ respondent. At the hearing of the Notice to show Cause, *Counsel for the Applicants wrongfully applied for Stay of* Execution and misled a new Deputy Registrar to stay Execution which powers he did not have. - 11. THAT we had to appeal to a Judge of High Court to set aside the illegal Order of the Deputy Registrar. - THAT thereafter, the applicants made several applications for $12.$ The High Court, all of them haphazard and reckless which were dismissed with costs. - THAT in the meantime, we initiated Execution of Proceedings $13(i)$ to recover some of the costs in the Court of Appeal arising out of striking off the Notice of Appeal and the Appeal. We attached Motor Vehicle Registration number 363 UEE but when it was claimed that it belonged to a different person and we reached a payment settlement with the respondents stopping attachment, the respondents still went ahead to refer to a single Judge the

decision of the Registrar allowing attaching the vehicle particularly the powers of the Registrar.

$(ii)$ A single Judge dismissed the Application but the respondents still referred the matter which was now academic to a full bench which dismissed the reference with costs.

$\sim$

- THAT the Registrar taxed the Bill of Costs arising out of the $(iii)$ said reference and awarded Ug. Shs. $6,000,000$ = instruction *fee but the respondents made a reference to a single Judge* who dismissed it with costs. - $14.$ THAT despite a single Judge having dismissed Misc. Application No. 33 of 1998 and No. 34 of 1998 which *were for extension of time* within which to lodge the Appeal and despite a sum of USS 211,200 having been entered as a preliminary Decree and there was no Appeal, a single Judge of the Court of Appeal proceeded to entertain Civil Application No. 44 of 1998 for extension of time within which to appeal, which he granted allowing the *respondents to appeal* against the whole Judgment Decree. - $15.$ *THAT we successfully made a reference to a full bench of the Court of Appeal in Civil Reference Appeal No. 55 hence the* Present Supreme Court Appeal No. 2 of 2000 against the *Ruling and Orders of a full bench allowing the Reference* Appeal. - THAT Supreme Court Civil Appeal No. 2 of 2000 has no 16. slightest probability of success because a full bench of the Court determined and allowed the reference upon interpretation and

applicatiot, t2f Section 70 of citil I'nrcedure Act and Rtle 5J of the ('ourt of Appeal Rrles u'hich are very clear. The Ruling of a fi l Bench appears at pages 17-58 of the Record of Appeal".

## In reply Mrs. Krta strted in paregreph 6 end l0 of her alfidavit as follows:-

"6 that whereas it is averred in paragraph l6 of the affidavit that Supreme Court Civil Appeal No.2of2000has not the slightest chance ofsuccess, our advocates M/s Byenkya, Kihika & Co. Advocates have reliably informed me, which information I verify believe that we indeed have good chances ofsuccess on appeal as the Justices of Appeal addressed their minds to matters not relevant to an application for extension of time when deciding Civil Reference No. 55 of 1999 in favour ofthe applicants.

l0 That I am funher reliably informed by our advocates that in any case, the issues to be determined before the Supreme Court in Civil Appeal No. 2 of2000 arising out ofthat (six) the learned Justices ofthe Coun ol Appeal erred in law and fact by lailing to consider matters relevant in granting an order for extension of time."

I notice that the formulation ofthe above paragraph ( l0) is confusing. Mrs. Kata in not a lawyer. Paragraphs 6 and l0 of her aflidavit and the submissions of Mr. Kihika do not dispute the claim that a preliminary decree for US\$211,200 was given to the applicant and that that decree remains unsatisfied. Again Mrs. Kata's affrdavit and Mr. Kihaka's submissions do not dispute the assertion by Mr Babigumira that the order of a single Justice of Appeal allowing the respondents to appeal out ol time which included the said amount of US\$ 2l 1,200 was set aside and makes it improbable that the appeal will succeed.

The ruling of the Coun of Appeal was not annexed to Mrs. Kata's aflidavit in reply. On the face of it, the probability of success of the appeal. at any rate, as regards the bulk of the amount claimed is not certain. I am not considering the merits of the pending appeal. But I do not think that the mere filing ofa notice and the memorandum ofappeal is evidence ofthe fact that an appeal will succeed. So grounds (a) and (b) must succeed.

Grounds (c) and (d) concern the muhiplicity of proceedings in the lower courts resulting in the award of costs by those courts. This is reflected in Mwebembezi's affidavit.

The issue of payment by the respondents of the past costs and the costs of the appeal are interesting. Subrule 100(3) itself and Abdullas case are authority for the view that I can order the respondents to provide further security for past costs and costs ofthe pending appeal.

It is evident that the respondents with some difficulty paid some of the past costs. The supplementary affidavit of Mwebembezi and the testimony of Mrs. Kata show that some cheques issued to cover past costs were dishonoured. To correct the posilion some cash was paid in portions or replacement cheques were issued. Even the evidence olMrs. Kata when she was cross-examined showed first that the second respondent is out of the country on a course whose duration she does not know. He went on that course after judgement against him and the first respondent had been obtained and apparently, after a wanant for his arrest had been issued. This has not really been challenged by the respondents. According to Mrs. Kata. the second respondent has only returned to Uganda for a brief period after which he went back to the U. K. for "further studies" on an indefi nite computer course.

Some payments towards settlemenl of past costs were made by the respondents However evidence clearly shows that the respondents had problems in paying. I think that counsel for the applicant has speculated somewhat about the likely costs to be awarded in respect ofthe appeal pending in this court since the court has discretion about awarding costs and if costs are awarded, the taxing officer decides the amount to be awarded. This is also true in another matter in the Court of Appeal. But since his clients worn in thal Court and there remains only the issue of taxation, there is no doubt that in the Court of Appeal, the applicant will get costs perhaps not as much as counsel has estimated. The issue raised by grounds (c) and (d) which is that more costs arose out ofthe institution of various causes in the courts below has not been denied. So these two grounds must succeed.

## Ground (e) to (f) were formulnted as follows:-

- O (e) The respondents have exhibited fraudulent conduct that points to their deliberate intentior/reluctancy not to pay the Decretal sum and the taxed and allowed costs. - (f) The Respondents have demonstrated by their conduct that they have no assets from which costs can be realised. - (g) That the Statutory Security for costs deposited in Coun is too inadequate as to meet the past costs and the costs ofthe Appeal. - (h) That the Application has been filed without any delay

(i) That in the circumstances of this case, it is just and proper for this Court to exercise it's discretion and order the respondents to deposit further security for costs at least in the sum of Ug. Shs. 150,000,000/= -within two weeks or such period as the Honourable Court deems proper andjust.

ln his written and oral submissions Mr. Babigumira amplified matters sworn to by Mr. Mwebembezi in his aflidavit of 4'r' May 2000. The following paragraphs l7 to l9 are pertinent.

17. (i) THAT as of now, following Bills of Costs in the High Court have been

taxed and allowed as per attached Certificates of Taxation marked J I -J6

| | TOTA I | 27,571,582/= | |-----|-----------------------------------------------------|-----------------------| | (0 | Civil Application No.937 of I 999------------------ | 2.364.000/-- | | (e) | Civil Application No.806 of 1998 | 835,000/: | | (d) | Civil Application No.733 of 1998 | 809.500/: | | (c) | Civil Appeal No. 210 of 1999---------- | 708.000/- | | (b) | Civil Application No 1006 of 1998------- | 438,000/: | | (a) | Civil suit No 738 of I 995-------------- | ------- -14.420.0821- |

| (ii) | THAT as of now, the following Bills of Costs have been taxed and | |------|---------------------------------------------------------------------------| | | allowed in the Court of Appeal as per attached Cenificates of Taxation | | | marked K1-K3. | | (a) | Civil Reference/Appeal No. I I of 1998---- 6,222,0001= | | (b) | Civil Application No.6 of 1998-------------- --- 6,147,000/= | | (c) | Civil Reference/Appeal No.55 of I 999---------- 15.073.000/= | | | TOTAL 27.442.000/= |

(iii) The lollowing Bills of Costs are pending Taxation in the Court of Appeal and

photocopies of the Bills of Costs filed in Coun are herewith attached and marked L I -L3.

Civil Appeal/Reference No.i4 of 1998--- (a)

- Civil Application No.7l of I 999--------- (b) - Civil Application No.44 of 1998----------- (c) - That there is Civil Appeal No. 44 of 1999 still pending in the Coun of Appeal but this Appeal was filed upon an Order ofa single Judge granting leave to appeal out of time which Order has been set aside by a full bench giving rise to Civil Appeal No 2 of 2000 (ii)

- l8 (i) THAT since July 1999, the 2nd respondent Henry Kawalya is on the run/hiding because of the several warrants of arrest issued against him by the High Coun and Coun of Appeal arising out of the numerous haphazard/reckless applications the respondents were making to the Courts. - (ii) THAT if the respondents lose Supreme Court Civil Appeal No. 2 of2000 which has no slightest probability of success, the 2nd respondent will continue in hiding and the l" respondent according to the conduct of the respondents has no assets which can be sold and the costs realized. - l9 THAT the ends ofJustice required that the respondents who seem to have no assets according to their conducl either belonging to their company or Henry Kawalya himself and also seem very reluctant to pay Decretal sum and taxed costs be ordered to deposit further securily for costs for the past costs which are already far in excess ofthe Statutory security for costs of Ug. Shs.400,000/: and the costs yet to be incurred in Supreme Coun Civil Appeal No. 2 of2000 before their Appeal can be heard.

Mrs. Kata swore an aflidavit in reply. Paragraphs 7 to l4 state as follows:-

That whereas paragraph l7 ofthe affidavit in support ofthe application sets out the bills of costs allowed and taxed, totalling Shs.55,016,582 Mr. Mwebembezi omitted to depose to the fact that the respondents have paid a total of Shs.30,463,000/= between the dates of 5'r' October 1998 and l3'h June 2000. A summary of the amounts paid to counsel lor the applicants Babigumira & Co Advocates indicating the dates plus copies ofthe receipts are collectively attached as annexture 'B'. The statement by Mr Mwebembezi in paragraph l8 that the respondents have been reluctanl to pay the taxed costs is therefore false.

- I That in addition to the above mentioned monies already paid, the applicant attached and sold Motor vehicles Toyota Corolla UAS 645. Dyna Truck UAN 775 and Dyna Truck UBJ 920 lor amounts that we do not yet know. - That contrary to what is averred in paragraph 19 of the affidavit in support, it is not just that respondent do pay security for past costs as the respondents have already paid the major bulk olthe costs. 9 - t0 That I am further reliably informed by our advocates that in any case, the issues to be determined before the Supreme Court in Civil Appeal No.2 of 2000 arising out of Civil Reference No.55 of lggg inter alia erred in fact and in law that the learned Justices ofthe Court of,Appeal erred in law and fact by failing to consider matters relevant in granting an order for extension of time. - Il. That I am further reliably informed by our advocates that the past bills of costs enumerated in paragraph 17 of the affidavit in support, are not relevant to the pending appeal. That is to say bills ofcosts arising out of: - a) Civil Suit No. 738 of 19995

- b) Civil Application No. 1006 of 1998 - c) Civil Appeal No. 230 of I999 - d) Civil Appeal No. 733 of 19998 - e) Civil Application No 806 of 1998 - 0 Civil Application No 937 of 1999 - g) Civil Reference No I I of 1998 - h) Civil Application No. 6 of 1998 - t2 That I am further reliably informed by my advocales that the costs ofthe pending appeal which arise from an interlocutory matter, i.e., an application for extension of time are likely to be no more than Shs.2,000,000/-.

That it is not true as is stated in paragraph l9 that the Respondents do not have assets". |.j

As stated earlier in this ruling, Mrs. Kata was cross-examined on part of her aflidavit.

The only assets mentioned by Mrs. Kata during the cross-examination were ofTice furniture. Whether this revelation was deliberate in that she did not want to reveal other propenies because ofthe fear that the decree holder could attach them I do not know. But certainly this reveals a lot namely that the respondents do not have substantial properties. which could be sold to realise the costs. h is also evident that a substantial portion ofpast costs remain unpaid.

Mr. Babigumira stressed that what is contained in Mwebembezi's affidavit that the respondents have failed to pay past costs and that the land title of lga's land is in effect not dependable; that the second respondent has deliberately gone out ofthe country to avoid enforcement of payments ol costs through committing him to prison and that the respondents have no assets {iom which the applicant can realise the costs. Clearly the oral testimony ol Mrs. Kata that the only assets which the respondents have is office furniture appears to suppon this last point.

Mr. Babigumira had proposed that I should grant the application and order the respondents to deposit Shs. 150,000.000/= as further security for costs.

Mr. Kihika relied on Rule 100(3) of this Court and on the authority of Abudalla (Supra) for the view that security for costs must relate only to matters before the Supreme Court. He contended that in this application the applicant brought in extraneous matters (i.e. causes from High Court and Court of Appeal and costs related thereto) for purposes of asking lor funher security for costs. He disputes lhe relevance of claims set out in paragraph l7(i) and l7 (ii)(c) of Mwebembeza's affidavit. He referred to payment of Shs.3 0.463,000/= stated in para 7 of Kata's affidavit and contends that his clients have paid past costs.

I accept that some but not all past costs have Shs.30,463,000/= stretched over the period 5s October apparently with difTiculty. been 1995 paid. Payments of to l3s June, 1999

Contrary to Mr. Kihika's contention, Abdulla case is not authority for his proposition that no security for costs for matters dealt with by the lower courts can be made. At page 450F the East African Court ofAppeal in that case observed that-

> " lf the intention v'orri not b ittclt le pou'er to order seatri0, .for unpaid costs in the uturt helow the uncluding words (i.c. past cosls relaling b lhe matters in question in the appeal) of the rule appear redundant.

'l'he mauers in qtestion in the appeal must be lhe matters in question in lhe aclion (or perhaps onll,some of them) and the ('OS'4S AWARDED IN I'HI:: ('OItR1'BELOI{ would also normally' be in questiort in the appeal either cotsequentialll' or, in exceptional case.s, directll"'.

lndeed in Abdulla's case the East African Coun ofAppeal dismissed the applicarion because (i) there was an existing order made by the lower court ordering the respondent to pay the costs in equal monthly instabuents of Kenya shsl00/= which the respondent had been regularly paying for more than a year, and (ii) because of the circumstances of that case namely that a novel and imponant point of law was in issue in the appeal pending before the Court of Appeal and (iii) there had been substantial delay in making the application for the security. These matters clearly show a distinction between Abdulla case and the present application. Moreover having regard to the whole of Rule 100(3), I agree with the opinion in Abdalla case that the words "security be given for paymenl of past costs relating to the matters in question in the appeal" refer to costs awarded in the courts below relating Io the litigation now the subject of appeal to this

coun

Be it noted that in Abulla case the respondent was paying the instalments regularly in obedience to an order of the court. ln the present application there is evidence that a number of coercive procedures have been used to realise payment ol some ofthe past costs. That the second respondent is temporarily out ofthe jurisdiction of courts of this country and appears to have eluded warrants of arrest for him. The conduct ofrespondents cannot help in these matters.

The respondents do not appear to own substantial property out of which costs can be realised. Considering all the factors presented in this case, I am satisfied that this is a fit case where I should make an order for provision of further security for costs. In doing so I am conscious ofthe need for the respondents to pursue their rights in our courts. I allow this application with costs to the applicant. In cases like this one, my general view is that assessment of probable costs for which security is to be provided should normally be made by the registrar. This would involve attendance to the registrar by the two sides. However I take note of the fact there are unpaid past costs. But having seen what has happened in this matter I will myself do the best I can by fixing a figure. Considering all the circumstanees of the case I order that the respondents must each provide security in the sum of Shs.31,000,000/= (Ug. Shs Thirty one million) within forty five (45) days from the date hereof

Datethis ilG -o^r,r-CI--!!&- 2000

Ju \q ekoo preme Court . \\.