Sentongo v I and M Bank Limited (formerly ) Orient bank (u) Limited (Civil Application 113 of 2023) [2023] UGCA 153 (19 May 2023)

# THE REPUBLIC OF UGANDA

## IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

## CIVIL APPLICATION NO. 113 OF 2023

(Arising from Civil Appeal No.0001/2023)

(*Arising from Consolidated High Court Civil Suits no.464 of 2018 & 038 of 2019*)

HARUNA SENTONGO ...................................

#### **VERSUS**

## I&M BANK LTD (formerly) ORIENT

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## BANK (U) LTD :::::::::::::::::::::::::::::::::::

## **BEFORE: HON JUSTICE OSCAR KIHIKA, JA**

*(Sitting as a single Justice)*

#### **RULING OF COURT**

This application was brought under Rules $2(2)$ , $6(2)(b)$ , $42(2)$ and Rule 43 of the Judicature (Court of Appeal Rules) Directions SI 13-10 and Section 98 of the Civil Procedure Act seeking for orders that;

- 1. An order of stay of Enforcement and or Execution doth issue, staying enforcement, and execution of the Judgment, Decree and or Orders of the High Court, made in *Civil Suits HCCS No. 464/2018 and HCCS No. 036/2019:* Haruna Sentongo Vs Orient Bank (U) Ltd, and or restraining the Respondent from taking any steps or carrying out any actions of any nature, capable of interfering with, or affecting Civil Appeal No. 0001 of 2023, until the hearing and determination Appeal. - 2. Costs of this application be in cause.

## Background

The background of this application as can be discerned from the pleadings and the a-ffidavits on record is as follows;

In December of 2015, or thereabout, the Applicant embarked on a project of constructing a commercial property known as Segawa Market, on land situated on Kibuga Block 12 Plots 250 & 251, Kisenyi. The Applicant approached the Respondent for a financiai facility for completion of the commercial blocks for Segawa Market, which was to be rented out to tenants to derive rental income. Both parties executed a facility letter dated 22nd February, 2016, for a Loan of UGx 5,000,000,000 (Five Billion) and it was agreed, that the facility would only be serviced through rent collections from Segawa Market if the Respondent Bank funded the development. It was the Applicant's case that the Respondent Bank breached the facility contract by failing to disburse the agreed sums of monies.

According to the Applicant, the Respondent Bank would purport to credit his account, and synonymously liquidate the loan, paying itself back immediately with the sums credited, and the sums it would repay itself were always reflected as "Loan amounts recovered".

The Respondent Bank on the other hand, claimed that between February to October 2016, the Applicant was granted several loan facilities. These loan facilities were, at the request of the Applicant, consolidated into one term loan with a single monthly instalment amortized for a period of five years. The Applicant, however, failed to meet his loan repayment obligations consequent upon which the Respondent Bank issued with two notices of default; one on the 22nd of December 2016 and the other on 1Sth June 2017.

The Applicant then instituted Civil Suit No. 464 of 2Ol8 in the High Court of Uganda the credit facilities granted to him by the Respondent. The Respondent, in turn instituted High Court Civil Suit No. 036 of 2079 against the Applicant seeking to recover the sum of UGX 10,384,308,959/= on account of the credit facilities advanced to the Applicant.

Both suits were consolidated and judgment was on the 23rd of December 2022 entered in favor ofthe Respondent wherein the Applicant was ordered to pay the sum of UGX 10,384,308,959 being the decretal sums owing to the Respondent and UGX 150,000,000/= as general damages.

The Applicant then filed in the High Court Misceilaneous Application No. 009 of 2023 seeking for orders of stay of enforcement and execution of the orders of the court. On the l0th of February 2023, the Court granted the Applicant's application for stay of execution on condition that the Applicant deposits a Bank Guarantee for the sum of UGX 7,227,479,035.464 within one month form the date of the ruling. The Applicant, it appears, failed to comply with the conditions as stipulated by the Court order.

The Applicant then filed Civil Appeal OOl of 2023, appeeJing the decree and orders in consolidated Civil Suits No.464 l2Ol8 and No.036/ 2O 19. The Appiicant also filed the instant application in which he seeks an order of stay of enforcement and or execution, staying enforcement, and execution of the Judgment, Decree and or Orders of the High Court, made in Clvll Sults HCCS No.464l2OL8 and HCCS No. O36/2O19: Haruna Sentongo Ve Orlent Bank (Ul Ltd, and or restraining the Respondent from taking any steps or carrying out any actions of any nature, capable of interfering with, or affecting Civil Appeal No. 00O 1 of 2OO3, until the hearing and determination of Civil Appeal No. 1 of 2023.

The grounds upon which the application is premised are set out in the Notice of Motion and the affrdavit of the Applicant MR. HARUNA SENTONGO and are briefly that;

1. Judgment utas deliuered in Consolidated Suifs HCCS No. 464/2O18 and HCCS No. O36/ 2O19: Hantna Sentongo Vs. Oient Bank (U) Ltd. Therein, the ' tial Court failed to take into consideration key mateial euidence of a failure of di.sbursement of loan omounts, and it ened and held that the Applicant i.s indebted to ttle Respondent in a sum of Ugx. 10,294,334,391/;

- 2. The Applicant filed a Notice of Appeal against the Judgment, Decree and Orders of the trial Court, both in tle trial Court and this Court, and serued a apg thereof upon the Respondents, utithin the time prescribed under tlrc la ut; - 3. Tlw Applicant has since also filed in this Court an appeal against ttte Judgment, Decree and Orders made in Consolidated Suits HCCS No. 464/2018 and HCCS No. 036/2O19: Haruna Sentongo Vs. Orient Bank (U) Ltd, uide Ciuil Appeal No.0O1 of 2023 and the appeal is pending lrcaring and determination; - 4. The appeal has a likelilnod and probability of success as ttte appeal raises a Prima facie case, and argaable grounds, uhich utill meit judicial consideration by th.e Justices of Appeal, as are contained in the Memorandum of Appeal; - 5. At tiol, the Applicant adduced unrebutted euidence uthich utill be considered on appeal demonstrating thnt earlier obtained loan facilities for the deuelopment of Nakayiza Mall on Kibuga Block 12 Plots 25O, 251 and 252, were settled; - 6. Tle Applicant also adduced euidence meiting considerotion on appeal demonstrating that the specific Credit Facilitg under di-spute, u.thich the Applicant had applied to obtain, for the deuelopment of Segaula Market on Kibuga Block 12 Plots 250, 251 and 252, lopsed afier 3O (thirtg) days tt ithout <sup>b</sup>e ing dis bur s e d; - 7. Tle Applicant demonstrated that loan amounts for the deuelopment of Seganaa Market were neuer made auailable for this use as disbursements utere reuersed back on the same date of disbursement as loan amounts recouered. - 8. The aboue euidences utere unchallenged, lnu.teuer, the trial court totally missed this euidence, and failed to properlg eualuate it, ulLen determining Ciuil Suits HCCS No. 464/ 2018 and HCCS No. O36 of 2O19; - 9. Tlere is a seriozs and imminent threat of execution of tte Judgment and Decree before the appeal is heard and determined, uthich utill render the

pending appeal nugatory and occasion a serious injustice upon th.e Applicant;

- 10. Tle Respondent has extracted a decree from tle Judgment, uthich is a knoun preliminary step in exeantion, and has aduertised for sale bg public auction, the Applicont's propertg compised in Kibuga Block 12 Plots 25O, 251 and252; - <sup>1</sup>1 . Further, the Respondent is already in possession of tlLe certificates of title for the Applicont's properties comprised in Kibuga Block 12 Plots 25O, 251 and 252 uhich are of substantial ualue, from which it is able to recouer anA sums slnuld the appeal return unsuccessful;

The respondent filed an affidavit in reply deponed by MUSHEMEZA CHEGUEVARA, opposing the application and briefly states as follows;

- l. On the 22"d daA oJ February, 2016, the Applicant obtained a facilitg uorth UGX. 5,OO0,OOO,000(Uganda Shillings Five Billion onlg). Tht"s facilitg utas in addition to other facilities alreadg obtained by the Applicant. Tlrc aforementioned facility utas secured bg propertg comprised in Block 12 Plots 251 and 825 Mengo and Block 12 Plot 25O. - 2. Tle facilitg uas for construction of a mall on Kibuga Block 12 Plots 25O and 251 Mengo, lau.rcuer, it was mi.sapplied bg the Applicant to construct on an adjoining plot Kibuga Block 12 Plots 252, land at Ki.senyi. - 3. On the 16th mag, 2O16, the Applicant obtained a further ouerdrafi facility for UGX. 10O,00O,0OO for tlrc completion of a stapping mall on Block 12 Plots 25O and 251 Mengo, Ki.sengi. - <sup>4</sup>. The Applicant tlvough a letter dated 2 6th MaA 2 0 1 6 requested for financing of UGX. 1,5O0,OO0,O00. On the sth JulA, 2016, lE obtained a furtler focilitg uorth UGX. 1,50O,0OO,OO0(One billion, Fiue Hundred Million Shillings) and it utas seatred bg properties comprised in Block 12 Plots 250, 251, and 252 Mengo Kisenyi.

- 5. As a condition of focility dated 5h Ju1y,2016, the Applicant through this letter dated 14tn Jufu,2016, undertook to route rental proceeds from Segau.ta Mall (Plots 25O, 251 and 252 Kibuga Block 12) through the Respondent. - 6. Upon failing to meet his loan repaAment obligations, the Applicant through <sup>a</sup> Ietter dated 14th October 2016 requested for consolidation of his eisting loans utith the Respondent into one term loan utith a single monthlg instalment amortized for a period of 5 years. - <sup>7</sup>. That the Respondent tlvough its letter dated 1 8th October 2016 referred to the Applicont's reEtest for amalgamation and infonned him its acceptance of the amalgamation and that his account utas in excess of UGX, 184,903,184/= (Uganda Shillings One Hundred Eightg-Four Million Nine Hundred Three Thousand One Hundred Eightg-Four onlg). The Respondent demanded ttte paAment of the outstanding uithin 3O days. - 8. That the Respondent amalgamated the Applicant's loans and offered him a loan facilitg in its letter dated 12th October consolidating the Applicant's loan facilities as per offer letters OBL/ ADV-3952/ 112/ 112 dated 5h JulA, 2016 for term loans UGX. 2,8O5,883,OOO/- (Uganda ShillirLgs Two Billion Eight Hundred Fiue Million Eight Hundred Eightg-Three Thousand only) and UGX. 6,439,629,000 (Uganda Shillings Six Billion Four Hundred Thirtg-Nine Million Sk Hundred Twenty-Nine Thousand); and ouerdrafi of UGX. 45O,OOO,O00 (Uganda Shillings Four Hundred Fifig Million onlg). - 9. That the Applicant continued to unsatisfactoilg met hi-s monthlg repaAment obligations and the Respondent issued a notice of default dated 22"d December,2Ol6. - 70. TLnt afier persistent default and failure bg the Applicant to meet his monthly repagment obligations for close to a Aear, the Respondent issued the Applicant uith a notice of default tlvough its former lautgers dated 15lh June, 2O17 demonding for the repaAment of the entire outstanding of UGX. 10,294,334,391/ - Uganda Shillings Ten Billion T\to Hundred Ninety-Four

Million Three Hundred Thirtg-Four Thousand Three Hundred Ninetg-One onlg).

11. On the 23d dag of December 2O22, the High court deliuered its judgment in consolidated Ciuil Suits No. 464 of 2O18 and Ciuil Suil No. 36 of 2019 u.therein it decreed and ordered that the Applicant, Mr. Haruna Sentongo, is indebted to the Respondent, I&M Bank (Uganda) Limited fonnerlg Oient Bank Limited in the sum of UGX. 10,384,308,959 (Ten Billion Three Hundred Eightg-Four Million Three Hundred Eight Tlnusand Nine Hundred and Fifig-One).

## Representation

At the hearing of this application, counsel Arnold Norgan Kimara appeared for the Applicant, with the Applicant in attendance, while Counsel Bruce Musinguzi and Counsel Joachim Kunta Kinte appeared for the respondent. Both parties filed written submissions which they adopted.

## Consideration of the appllcation

I have carefully considered the affidavits and submissions of both parties and the wealth of authorities cited by both parties.

I must note however that this application is essentially for two orders. The first order is stated to be that of ".......an order of stag of enforcement and or execution of the Judgment, Decree and orders of the High Court..." and the second order is that of " .... ....restraining the respondent from taking anA steps or carrying out anA actions of ang nature capable of interfering with or affecting Ciuil Appeal No. 001 of 2023..." in essence, the frrst order is for a substantive stay of execution while the second order is for a temporary injunction against the respondent. I shal1 handle the two orders as sought separately.

#### ORDER FOR STAY OF E>(ECUTION

The authorities of Lawrence Musiitwa Kyazze Vs Eunice Buslngye SCCA No. 18 of 199O; Dr. Ahmed Muhammed Klsuule Vs Greenland Bank (In Ltquidationl SCCA No. 7 of 2O2O and Gashumba Maniraguha vs Samuel

Nkundiye SCCA No. 24 of 2015 re-state the principles for the grant of a substantive order for stay of execution such as one before me.

Recently, the Supreme Court in the application by **Hon. Theodore Ssekikubo &** Others vs. The Attorney General and Another, Constitutional Application **No 06 of 2013** clearly re-stated the principles as follows:

In order for the Court to grant an application for a stay of execution;

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"(1) The application must establish that his appeal has a likelihood of success; or a prima facie case of his right to appeal

(2) It must also be established that the applicant will suffer irreparable damage or that the appeal will be rendered nugatory if a stay is not granted.

(3) If 1 and 2 above has not been established, Court must consider where the balance of convenience lies.

(4) That the applicant must also establish that the application was instituted without delay."

The issue for determination by the Court is whether the applicant has adduced sufficient reasons to justify the grant of a stay of execution.

## 1. Prima facie case with likelihood of success

On the issue of likelihood of success, the applicant's counsel attached the Memorandum of Appeal filed in this court in Civil Appeal No. 1 of 2023 marked annexure T' to the affidavit in support of the application.

The applicant's counsel relied on the decision in the case of **Lawrence Musitwa** Kyazze vs Eunice Busigye SCCA No. 18/1990 in which the Supreme Court instructively guided as follows; "It is the appellate Courts interest to see that the status quo is preserved, so that Courts decisions are not rendered nugatory." Counsel argued that where a party is exercising its unrestricted right of appeal, and the appeal has likelihood of success, it is the duly of the Court to make such orders as will prevent the appeal from being nugatory if successful. Counsel further submitted that, the execution of a decree, ultimately renders an appeal against that decree moot, and nugatory. He argued that, in the instant application, the execution of the Judgement subject of Civil Appeal No. OOOI /2023 would ultimately render the appeal nugatory. He further submitted that in Civil Appeal No. O0l/2023, the Applicant is seeking an order reversing the findings of the trial court as to liability or the decretal sum and execution of the decree in this case will bring to hnality the proceedings in the pending litigation.

For the respondent, counsel argued that whereas the applicant made reference to the Memorardum of Appeal filed in this court, he did not provide materiai evidence in support of his grounds of appeal. Counsel argued that the applicant lacks evidence to support his appeal and is thus unlikely to succeed.

From my perusal of the applicant's affidavit in support of his application, paragraph 4, the applicant states that he adduced unrebutted evidence which will be considered on appeal demonstrating that earlier obtained loan facilities for the development of Nakayiza Mall on Kibuga Block 12 Plots 250, 251 and 252, were settled and also adduced evidence meriting consideration on appeal demonstrating that the specific Credit Facility under dispute, which the Applicant had applied to obtain, for the development of Segawa Market on Kibuga Block 12 Plots 250, 251 and 252, lapsed aJter 30 (thirty) days without being disbursed. The appiicant has attached the Memorandum of Appeal filed in this court and stated the grounds in paragraph 6 of the affidavit in reply and stated;

"6. THAT the appeal hos merit and a likelihood orlsuccess, and it raises senous arguable grounds meriting judicial consideration uthich are contained in the Memorandum of Appeal, as follouts, THAT;

The learned tial Judge erred in la ut and fact, uthen tLe did not take into account the euidence of loan amounts purported to haue been disbursed,

claued back, reuersed and or recouered bg the respondent, and he arriued at the incotect holding tlnt the appellant is indebted to the respondent;

n. The leamed trial Judge erred in lato and fact, when Le failed to find that the credit transaction betueen the parties initiated under the contract dated 22"d February, 2016 failed and repudiated, and arriued at an inconect decision in Consolidated Ciuil Suits HCCS No. 464/ 2018 and HCCS No. 36 of 2O19;

- The learned trial Judge ened in lau and fact uthen he misapplied the laut on pleodings and fraud, and or applied the la ut uith material inconsistencies which occasioned a miscarriage of justice, and he arriued at an inconect decision in Consolidated Ciuil Suits No. HCCS No. 464/2O18 and HCCS No. 36/2019; - 1U The learned trial Judge ened in lau and fact uthen he misapplied the laut on illegalities, and failed to make a finding on uncontrouerted illegalities of "insider dealing" and 'champertous conniuance" bg the respondent in its dealings uith the appellant, and arriued at an incorrect decision which occa-sioned a mi-scarriage of justice; - U The learned trial Judge erred in latu and fact, uhen he failed to find the respondent liable in breach of contract, breach of statutory and fiduciary duties to the appellant, and uas fraudulent in its dealings and transactions uith tlLe appellant; - UT The learned trial Judge erred in laut and fact ulen he declined to aluard the appellant an order for recovery of sums taken in unjust enichment, general and special damages for loss of rental business income; - utt The learned trial Judge erred in la u.t and fact, u.then he failed to properly euoluate euidence on record as a u.tlrcle, and he arriued ot an incorrect decision dbmissing Ciuil Suit HCCS No. 464/2018, and an order granting HCCS No.36/2O19; - The leamed trial Judge ened in lau and fact, bg auarding the respondent un-prouen and excessiue general damages, excessiue interest and costs;" utu In Stanley Kang'ethe KlnyanJul v Tony Ketter & S Others [2O13] e KLR the Court of Appeal of Kenya described an arguable appeal in the following terms: '7ttl). An drguable appeal ls not one uhich must necessat-llg succeed, but one uthlch ought to be argued. Jullg beJore the court; one uthlch ls not Jrfinlous. vttt). In consld.er-lng an appllcatlon brought und.er Rule S (2) (b) the court lmust n.ot nake d.eJlnltlue or final ftndlngs of elther Jact or laut dt that stage as dolng so mag embarrass the ultlmate hearlng oJ the marln appeaL"

I hnd that the decision in Stanley Kang,ethe KlnyanJul v Tony Ketter & <sup>S</sup> Otherc (supral is of persuasive value and would adopt the same reasoning. It is thus not necessary to pre-empt considerations of matters for the full bench in determining the appeal. In the instant case, the applicant not only attached the Memorandum of Appeal but also laid out the questions for this court to determine in the appeal. It is therefore my considered view that the applicant has established that he has a prima facie case pending determination before this court-

### 2. Irreparable damage

The second consideration is whether the applicant will suffer lrreparable damage or that the appeal uttll be rendered. nugatory { a stag ls not granted..

In this regard, the applicant's counsel argued that the execution of the Judgement subject of civil Appeal No. 0001/2023 would ultimately render the appeal nugatory. Counsel submitted that in Civil Appeal No.00Ol/2023, the Applicant is seeking an order reversing the findings ofthe triat court as to liability of the decretal sum and argues that execution of the decree brings to finality, any proceedings in litigation. counsel relied on the decision of Ruby opio-Aweri.

11 lPage

JSC (RlP) in Osman Kasslm Ramathan vs. Century Bollling Company Ltd (Supra), in which it was held that execution in itself is a final process of completing the proceedings of Court, and giving effect to decisions. The applicant's counsel submitted that in the instant matter, should the decretal sum under dispute on appeal be recovered before the determination of the appeal, the Appellate Court would be faced with a situation where the judgment of the trial court has been given effect, arrd its fina-l determination, has been put into f,rnal action. That the appellate court wouldn't be called upon to deliberate and re-appraise itself on matters that have been rendered moot, or even consider reversing a judgment which has been completed by execution.

For the respondent, counsel submitted that it is not enough to just merely plead substantial loss, the applicant must adduce evidence that he will suffer substantial loss should the application not be granted. Counsel submitted that the applicant must state the details of the loss and the court must be satisfied that the applicant will suffer irreparable loss as is argued in the affidavit in support of the application. Counsel submitted further that the mere fact that the applicant took out a mortgage with the respondent bank is enough for the applicant to have foreseen that the property could be sold in case of default.

The applicant stated in paragraphs 5.4 and 6 of his affidavit in support of the application that the Respondent never gave consideration for the mortgage and by its failing to disburse sums sought under the facility, it is a triable question on appeal whether the Respondent bears a valid mortgage interest in the suit property. If a stay is denied, substantial loss will result upon the applicant as the property will stand at the verge of being sold by the respondent. The term "irreparable damage" is defined in Black's Law Dlctlonary, 9tu Edition at page 447 to rllean;

udam.ages that cannot be easilg qscertalned because there ls no fixed pecunlary standard mcqsuremcttt'

In my understanding, the applicant has to show that the damage bound to be suffered is such that it cannot be undone or compensated for in damages.

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In Giella v. Cassman Brown & Co. [1973] E. A 358, it was held that by irreparable injury it does not mean that there must not be physical possibility of repairing the injury, but it means that the injury or damage must be substantial or material one that is; one that cannot be adequately atoned for in damages. Likewise, In the case of American Cynamide vs Ethicon [1975] 1 **ALL E. R. 504** it was held;

"The governing principle is that the court should first consider whether if the Plaintiff were to succeed at the trial in establishing his right to a Permanent *Injunction he would be adequately compensated by an award of damages for the* loss he would have sustained as a result of the Defendant's continuing to do what was sought to be enjoined between the time of the Application and the time of the trial.

In the instant case, the evidence of irreparable loss/ damage is in paragraph 9 of the applicant's affidavit in support of the application, which I have reproduced below;

"9. THAT if a stay is denied, substantial loss will result upon me, as follows;

9.1. THAT my appeal will be affected and even possibly rendered totally nugatory, which would effectively deprive me an opportunity to be heard on my appeal;

9.2. THAT I reasonable believe, that a deprivation of a right to be $\frac{1}{2}$ heard on appeal or an opportunity to be heard, would be a denial of fait access to justice, which is a loss not easily compensable in damages.

9.3. THAT I have been advised by my lawyer M/s Kimara Advocates & Consultants whose advice I verily believe to be true, that a denial by any circumstances of a right to be heard before a court of law, is non-quantifiable in damages;

# 9.4. THAT further, I reasonably believe, that a loss arising by the above deprivation, coupled with the colossal sums subject of appeal, aggregate to a substantial loss not easily reparable in law;"

Applying the above to the principals of irreparable damage, I find that the property subject of the appeal before this court is a commercial building whose rent proceeds can be ascertained. In addition, there was a valuation done on the property when the applicant applied for the loan facilities and as such, the value if the property in question can be ascertained and the same can be compensated in monetary terms, should the applicant's appeal succeed. I am therefore unable to find that the Applicant will suffer irreparable damage.

#### 3. Balance of Convenience

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The concept of balance of convenience was expounded in Jayndrakumar Devechand Devani Vs. Haridas Vallabhdas Bhadresa & Anor, Civil Appeal No. 21 of 1971 where the Court of East Africa observed *inter alia* that:

"Where any doubt exists as to the plaintiffs right, or if his right is not disputed, but its violation is denied, the Court, in determining whether an interlocutory injunction should be granted, takes into consideration the balance of convenience to the parties and the nature of the injury which the defendant, on the one hand, would suffer if the injunction was granted and he should ultimately turn out to be right, and that which the plaintiff on the other hand, might sustain if the injunction was refused and he should ultimately turn out to be right. The burden of proof that the inconvenience which the plaintiff will suffer by the refusal of the injunction is greater than that which the defendant will suffer, if it is granted, lies on the plaintiff."

In essence, balance of convenience lies more on the one who will suffer more if the respondent is not restrained in the activities complained of in the suit. Therefore, in arriving at the proper decision whether the balance of convenience favors the applicant or not, court must weigh the loss or risk at exposure for the applicant in the event the order is denied and the damage which could be suffered if it is not granted. In my view, court should equally examine the prejudice and the injury both parties are likely to suffer if the stay is granted or denied.

In this case the applicant is in possession of the suit property, a commercial building with various tenants carrying out business and the sale of the property will be to the detriment of the applicant. The appiicant thus prayed that the stay of execution is granted maintaining the status quo until the determination of the appeal pending before this court. I believe the ba.lance of convenience favors the applicant who is in possession and stands to be prejudiced if the suit property is sold.

### 4. Regulation 13 ofthe Mortgage Regulations

The respondent raised an important issue which this court must address in a grant of a substantive order for stay of execution such as the one before me. The respondent argues that the applicant has not fulfrlled the provisions of Regulation 13 (1) of the Mortgage Regulations. The applicant's counsel submitted that the circumstances of this matter are peculiar and exceptional in nature artd do not warrant imposition of a condition to furnish any other security for costs or due performance of the decree, in considering a grant of stay of execution. The applicant stated in paragraphs 12, 12.), - 72.6 of the affidavit in support of the application that at the lodging of the appeal, the Applicant already paid in this Court Security for Costs in compliance with Rule 105 of the Rules of this Court. That the Applicant has a.lso demonstrated further, that the Respondent is already in possession of the certificates of title for the Applicant's properties comprised in Kibuga Block 12 Plots 250,251 & 251 which are of substantial

value, even where there is a dispute whether the Respondent provided consideration for remaining in possession of the Applicants titles

Regulation 13 (1) of the Mortgage Regulations 2012 provides;

### 13, Adjournment or atoppege ofsale.

1. The court nay on the appllcatlon oJ the mortgago4 spouse, ogent oJ the mortgdgor or ang other lnterested partg and Jor reasonable cattse, ad. Joura a sale by publlc o:uctlon to a speclfied date and tlne upon paymcnt of a sec-urltg deposlt of 3oo/o of the Jorced sale ualue oJ the mortgaged propertg or outstandln,g dmount.

With regard to Regulation 13, I would rely on the decision of this court in Vloodmore Energy Consultancy Ltd & others Vs Guaranty Trust Bank (U) Ltd Civil Appllcatlon No. 27O of 2O16 in which this court interpreted the context in which Regulation 13 should be applied. In that case, even though it was an appiication for an interim injunction, court held that;

'athls courts understandlng oJ the aborn regvlatlon ls thol lt applles uthere the nortgogor ls seeklng to adJount a sale bg publlc auctlon to another date. I beller;e thls ls uthg the provlslon ls aery expllclt that the court mag adJount the sale to a speclfic date and tlmc upon pagnent oJ a sec-urltg deposlt ol 30% ol the Jorced sale value of the nortgdge propertg or outsta,ndlng amount.'

I would agree with the above position. Where there is an impedning sale by public auction and an applicant seeks to stop the sale, the regulation would not apply. In the instant case, the applicant seeks to stop rather than adjourn the sale. I am therefore of the considered view that Regulation 13 of the Mortgage Regulations would not apply in this case. Regulation 13 applies to a mortgagor who is seeking adjournment to another date to enable them redeem the property.

## 5. Securlty for due performance ofthe decree

The decision in Lawrence Musitwa Kyazze vs Eunlce Busigye SCCA No. 18/ 1990 held as follows;

oThe practlce that thls Court should adopt ls that ln generalo an appllcatlon tor d stag should be rnade lntornallg to the Judge who declded the case ulhen fudgment ls delluered. The Judge m.ag direct thrrt a fonnal motlon be presented on no'tlce (Order XLVfiI ttle 7.)' afier notlce oJ appeal has been filed. He may ln the meantlme grant a tetqtordry stag Jor thls to be done. The partles asklng for a stag shouW be prepared to rncet the condltlons set out ln Order X:EXIX Rule 4(3) oJ the C'lttll Procedure Rules. The temporary appllcation m.ag be ex parte.'

The order relied on above in the current Order 43 (4) ofthe Civil Procedure Rules No. 71- 1 of 2Ol4 and it states;

## n4. Stag bg Htgh Court.

(3) No order for stag of execrl'tlon shall be made under sub ntle (7) or (2) oJ thts t'ule unless the coura making lt ts satisfied-

(a) that substantlal loss rnag "esult to the partg applglng Jor stag of executlon unless the order ls made;

(b) that the appllcatlon has been made ulthout unreasonable delag; and

(c) that sec-urlty has been glaen bg the atrtplTcant for the due perJormance oJ the decree or order en mdg ultlmately be blndlng upon hlm or her.'

From the evidence on record, the applicant has not provided any security for due performance of the decree. I agree with the respondent's counsel that the circumstances of this case warrant the deposit of security for due performalce of the decree.

That being the case, it is my considered view that an order for stay of execution is not available to the applicant for failure to fulfill the mandatory requirement for deposit of security for due performance.

### ORDER FOR TEMPORARY INJUNCTION

For a temporary injunction to be granted, court is guided by certain principles which were laid out in the case of Shiv Conetructlon V Endesha Enterprises Ltd S. C. Ctwil Appeal No. 34 of 1992 where it was held that;

"The applicant must sLaut a pnus\_fug case with a probabilitg of success. An injunction utill not normallg be granted unless the applicant mioht otheru.tise suffer irreparable iniuru, which could not be compensated in damages. When the court is in doubt it will decide the application on the balance of conuenience."

Thus, the rules governing the grant of a temporary Injunction are;

- l. The granting of a temporary injunction is an exercise of judicial discretion and the purpose of granting it is to oreserue the matters in the stotus quo until the question to be inuestigated in the main suit is finallg di.sposed of. - 2. The conditions for the grant of tle interlocatory injunction are; - Firstly that, the applicant must show a nma act e uith a robabili of success. - 1t Secondlg, such injunction utill not nonnally be granted unless the applicant might otherutise suffer irreparable iniuru u.thich would not adequatelA be comDensated bu an award of damaoes.

## lll Thirdly if tlrc Court is in doubt, it would decide an application onthe balance of conuenience.

An order for a Temporary Injunction is granted so as to prevent the ends of justice from being defeated. The most important purpose of the grant of temporary injunctions is to preserve the matters in status quo until the question to be investigated in the main suit is finally disposed of. I have already found, while determining the first part of the application seeking an order of stay of execution, that the applicant has established a prima facie case ald that the balalce of convenience lies with the applicant who is in possession of the suit property.

It is trite that such interlocutory orders for a temporary injunction are granted at the discretion of court to maintain the status quo pending the determination of the main issues in the appeal before court. I hasten to add that Rule 2(2) of the Rules of this Court grants this court wide discretionary powers, and the inherent power, to make such orders as may be necessary for attaining the ends of justice.

The Supreme Court in Attorney General vs. Nakibuule Gladys Ktsekka [2O18] UGSC 30 (11 July 2O18) defined Judicial Discretion in the following terms; ol)lscretLon reters to the pouer or rlght glven to an indiuidual to make decisions or act accordlng to herlhls outn fudgment. Jttdlclal dlscretlon ls thereJore the pouer of a Judlclal olficer to make legal declsions based on her oplnlon - but I hasten to add - but wlthln general legal guldellnes. In Black's Laut lBctlonary Snd Edltlon, 'Judlcial and legal dlscretlon' ls defined as odlscretlon bounded bg the n es and prlnciples ol laut, ,...'

It is therefore my considered view that the applicant in this case has made out a case for the issuance of a temporary injunction restraining the respondent from the sale or interference with the suit property until the applicant's appeal vide Civil Appeal No. 001 of 2023 is disposed of by this court; arr order to preserve the status quo of the suit property, which the respondent had previously

advertised in the newspaper, until the determination of the appeal before this court. In the result, I allow this application in part and make the following orders;

- 1. An order of a temporary injunction is hereby issued restraining the respondent from carrying out any steps or interference with the suit property comprised in Block 12 Plots 251 and 825 Mengo and Biock <sup>12</sup> Plot 250 Mengo, the suit property in Civil Suits HCCS No. 46412018 artd HCCS No. 036/2019: Haruna Sentongo Vs Orient Bank (U) Ltd until the hearing and determination of Civil Appeal No. O0Ol of 2023. - 2. The application for a stay of execution is denied. - 3. Costs shall abide the outcome of the appeal.

v- te1 Dated this day of May <sup>2023</sup>

l/ OSCAR HN IKA JUSTICE