Sentongo v I and M Bank Limited (formerly Orient Bank Uganda Limited) (Civil Application 1069 of 2023) [2023] UGCA 301 (1 November 2023)

### THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT I(AMPALA CIVIL APPLICATION NO. 1069 OF 20.23

# s HARUNA SENTONGO::::::::::::::::::::::::::::::::::::::::::::::::APPLICANT

vs

## I&MBANKLIMITED

## (formerly ORIENT BANK (U) LIMITED RESPONDENT

# 10 BEFORE: CHRISTOPHER GASHIRABAKE JA

(Sitting as a Single Justice)

#### RULING OF COURT

15 This Application was brought under Rule 2(2),6(2),42(L),43,44(Ll of the Judicature (Court of Appeal Rules) Directions seeking for orders at;

1. An interim order doth issue staying the execution of the decree of the High Court (Commercial Division) in Consolidated Civil Suits No. 464 of 2OI8 and No. 036 of 2Ol9 until the determination of Civil Reference No. O23 of 2023 and Civil Application No. 113 of 2023 by a bench of three (3) Justices of Appeal; and ^

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2. Costs for this application be provided for

The grounds upon which this application is premised are set out in the Notice of Motion and the affidavit in the support of the application deponed by the Applicant, Mr. HARUNA SENTONGO and are briefly that;

- 1. On 23,a December 2022, the High Court (Commercial Division) in consolidated Civil Suits No. 464 of 2018 and No. 036 of 2OL9 delivered its judgment in favor of the Respondent. - 2. The Applicant was dissatisfied \rith the said decision of the High Court and accordingly filed Civil Appeal No. OO I of 2023 in this Honorable Court and the sarne is pending hearing and determination. - 3. On 14th March 2023, the Respondent advertised the Applicant's property comprised in Kibuga Block 12 Plots 25O, 251 and 252 for sale. - 4. The Respondent has further filed its bill of costs in the High Court (Commercial Division) vide High Court Taxation Application No. 158 of 2023 and the sarne has been fixed for hearing. - 5. On 27th March 2023, the Applicant filed Civil Application No. <sup>1</sup>13 of 2023 seeking an order staying the enforcement ar,d I or execution of the judgment, decree and orders of the High Court in Civil Suit No. 464 of 2018 and Civil Suit No. 036 of 2OL9 and or restraining the Respondent from taking any steps or carr5ring out any actions of any nature, capable of

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interfering with, or affecting Civil Appeal No. 0O L of 2023 until the hearing and determination of the appeal.

- 6. On 19th March 2023, His Lordship Hon. Justice Oscar John Kihika allowed Civil Application No. 113 of 2023 in part by granting the Applicant a temporary injunction restraining the Respondent from carrying out any steps or interference with the suit property comprised in Block 12 Plots 251 and 825 Mengo and Block 12 Plot 25O Mengo until the hearing and determination of Civil Appeal No. 0O I of 2023 but declined to issue an order of stay of execution to the Applicant. - <sup>7</sup>. On 27th September 2023, the Applicant filed a reference seeking to refer the Applicant's application for an order of stay of execution in Civil Application No. 113 of 2023 to a bench of three (3) Justices of Appeal for hearing and determination and variation of the decision of the single Justice of Appeal. - 8. The Applicant's reference and application for extension of time within which to file the same are pending determination by this Honorable Court. - 9. The Applicant's appeal is meritoriorls, raises serious questions and has a high likelihood of success. - 10. The Applicant's reference is equally meritorious and has a high likelihood of success. - <sup>1</sup>1. There is a serious and imminent threat of execution of the decree and orders of the High Court in Consolidated Civil Suits No.464 of 2018 and No.036 of 2019.

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12. T}:e Applicant filed a substantive application for stay of execution of the decree of the High Court (Commercial Division) in Consolidated Civil Suits No. 464 of 20 18 and No. 036 of 2Ol9 vide Civil Application No. 113 of 2023 and the sarne is pending hearing and determination by a bench of 3 justices of this Honorable Court in Civil Reference No. 113 of 2023.

- 13. The Applicant shall suffer irreparable damage and/ or substantial loss if this application is not granted. - The respondent filed an affidavit in reply deponed by MUSHE,MEZA CHEGUEVARA of Kampala Associated Advocates sworn on 2oth October 2023 opposing the application and stated briefly that; 10 - 1. The Respondent has not taken any steps to execute the Judgment of Court in Consolidated Civil Suits No. 464 of 2018 and 36 of 2OL9 and the above application is premature. - 2. On the 22"d day of February,2016, the Applicant obtained a facility worth UGX. 5,OOO,OOO,OOO(Uganda Shillings Five Billion only). This facility was in addition to other facilities already obtained by the Applicant. The aforementioned facility was secured by property comprised in Block 12 Plots 251 and 825 Mengo and Block 1 2 PLot 25O. - 3. The facility was for construction of a malI on Kibuga Block 12 Plots 250 and 251 Mengo, however, it was misapplied by the Applicant to construct on an adjoining plot Kibuga Block 12 Plots 252,land at Kisenyi.

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- 4. On the 16th may, 2016, the Applicant obtained a further overdraft facility for UGX. 1OO,00O,O0O for the completion of a shopping mall on Block 12 Plots 250 and 251 Mengo, Kisenyi. - 5. The Applicant through a letter dated 26tn May 2016 requested for financing of UGX. 1,500,000,000. On the sth July, 2016, he obtained a further facility worth UGX. 1,500,000,OO0(One billion, Five Hundred Million Shillings) and it was secured by properties comprised in Block 12 Plots 25O, 251, and 252 Mengo Kisenyi.

- 6. As a condition of facility dated sth Ju1y,2016, the Applicant through this letter dated 14tt July,2Ol6, undertook to route rental proceeds from Segawa Mall (Plots 250,251 and 252lfubuga Block 12) through the Respondent. - 7. Upon failing to meet his loan repa5rment obligations, the Applicant through a letter dated 14th October 2OL6 requested for consolidation of his existing loans with the Respondent into one term loan with a single monthly instalment amortized for a period of 5 years. - 8. That the Respondent through its letter dated 18th October 2OL6 referred to the Applicant's request for amalgamation and informed him its acceptance of the amalgamation and that his account was in excess of UGX, 184,903,I84/= (Uganda Shillings One Hundred Eighty-Four Million Nine Hundred Three Thousand One Hundred Eighty-Four only). The Respondent demanded the payment of the outstanding within 3O days. - 9. That the Respondent amalgamated the Applicant's loans and offered him a loan facility in its letter dated L2th October 2016 25

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consolidating the Applicant's loan facilities as per offer letters OBL/ADV-3952|Il2lLLz dated 5tn July, 2OL6 for term loans UGX. 2,805,883,000/- (Uganda Shillings Two Billion Eight Hundred Five Million Eight Hundred Eighty-Three Thousand only) and UGX.6,439,629,OOO (Uganda Shillings Six Billion Four Hundred Thirty-Nine Million Six Hundred Twenty-Nine Thousand); and overdraft of UGX. 450,O00,0OO (Uganda Shillings Four Hundred Fifty Million only).

10. That the Applicant continued to unsatisfactorily meet his monthly repayment obligations and the Respondent issued a notice of default dated 22"a December, 2016.

<sup>1</sup>1. That after persistent default and failure by the Applicant to meet his monthly repa5rment obligations for close to a y€ff, the Respondent issued the Applicant ',\rith a notice of default through its former lawyers dated 15th June, 2017 demanding for the repayment of the entire outstanding of UGX. 1O,294,334,391l-Uganda Shillings Ten Billion Ttwo Hundred Ninety-Four Million Three Hundred Thirty-Four Thousand Three Hundred Ninety-One only).

12. On the 23'a day of December 2022, the High court delivered its judgment in consolidated Civil Suits No. 464 of 2018 and Civil Suit No. 36 of 2019 wherein it decreed and ordered that the Applicant, Mr. Haruna Sentongo, is indebted to the Respondent, I & M Bank (Uganda) Limited formerly Orient Bank Limited in the sum of UGX. 10,384,308,959 (Ten Billion Three Hundred Eighty-20 25

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Four Million Three Hundred Eight Thousand Nine Hundred and Fifty-One).

13. The Applicant filed an appea-l in this court vide Civil Appeal No. O00l of 2023 against the decision of the High Court and filed

Civil Application No. 113 of 2023 seeking an order of stay of enforcement and or execution of the Judgment and Decree of the of the High Court.

L4. Court, in its ruling dated 19th May 2023 granted an order of a temporary injunction restraining the respondent from carrying

- out any steps or interference with the suit property in Civil Suits No. 464 I 2OL8 arrrd 36 I 2019. 10 - 15. Dissatisfied with the said ruling of the single justice, the Respondent filed a Reference vide Civil Reference No. 005 of 2023 for reference of Civil Application No. 113 of 2023 to a panel of three Justices and the same is still pending.

### Background

In December of 2015, the Applicant embarked on a project of constructing a commercia-l property known as Segawa Market, on land situated on Kibuga Block 12 Plots 25O & 251, Kisenyi. The Applicant approached the Respondent for a financial 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 20 25

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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.

5 According to the Applicant, the Respondent Bank would purport to credit his account, and synonymously liquidate the loan, payrng 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 arnortrzed 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. 10 15

The Applicant then instituted Civil Suit No. 464 of 2018 in the High Court of Uganda disputing the credit facilities granted to him by the Respondent. The Respondent, in turn instituted High Court Civil Suit No. 036 of 2019 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 on the 23.a of December 2022, judgment entered in favor of the Respondent wherein the Applicant was ordered to pay the sum of UGX 10,384,308,959 being the

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M4 decretal sums owing to the Respondent and UGX 150,0OO,OOO/= as general damages.

The Applicant then filed in the High Court Miscellaneous Application No. 009 of 2023 seeking for orders of stay of enforcement and execution of the orders of the court. On the lOth 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 <sup>7</sup>,227 ,479,035.464 within one month form the date of the ruling. The Applicant,failed to comply with the conditions as stipulated by the Court order.

The Applicant then filed Civil Appeal 0O 1 of 2023, appealing the decree and orders in consolidated Civil Suits No.464 I 2OI8 and No.036/2OL9. The Applicant also filed the instant application in which he seeks utn 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 Haruna Sentongo Vs Orient Banlr (Ul Ltd, Civil Suits HCCS No. 464l2OLg and HCCS No. o,3612o19 and or restraining the Respondent from taking any steps or carrying out any actions of any nature, capable of interfering with, or aJfecting Civil Appeal No. 0001 of 2003, until the hearing and determination of Civil Appeal No. 1 of 2023. 15 20

The Applicant filed Civil Application No. 113 of 2023 seeking for an order of stay of enforcement and or execution of the Judgment and Decree of the of the High Court and the court granted an injunction against the respondents from interfering with the suit property but

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>Mr

denied a stay of execution. The Respondent filed Civil Reference No. O05 of 2023 for reference of Civil Application No. 113 of 2023 to a panel of three Justices and the sarne is still pending. The Applicant also filed Civil Reference No. O23 of 2023 for reference of Civil Application No. 113 of 2023 to a panel of three Justices and also filed this Application for interim stay of execution pending the determination of Civil Reference No. 23 of 2023. The Applicant also filed Civil Application No. 1062 of 2023 for extension of time andlor validation of Civil Reference No. O23 of 2023.

#### <sup>10</sup> Representation

At the hearing of this application, Dernck Bazekuketta appeared for the Applicant, with the Applicant in attendance, while Bruce Musinguzi and Joachim Kunta Kinte appeared for the respondent. Both counsel submitted orally at the hearing of the Application and I commend them for their presentations which were delivered \ rith remarkable precision and eloquence.

### Applicant's Submissions

20 Mr. Bazelruketta submitted that the instant application seeks to stay execution pending determination of Civil Reference Number 023 of 2023 which reference seeks for the determination of Civil Application Number 113 of 2023 by a bench of three (3) Justices of Appeal. He submitted that there are three grounds upon which applications of this nature are granted and these include; there must be a competent notice of appeal, the substantive application for stay of execution and existence of a serious threat of execution as were summartzed by the 25

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# Supreme Court in Zubeda Mohammed and another Vs Lalia lhka Walia & Anor ,Supreme Court Civil Ref. No. 7 of 2OL6.

Counsel submitted that a Notice of Appeal was filed together with a Memorandum of Appeal vide Civil Appeal No. 0Ol of 2023. Regarding the existence of a substantive application for stay of execution, counsel submitted that the Applicant filed Civil Reference Number 023 of 2023 which is pending before this court. That the reference put Civil Application Number 1 13 of 2023, the application for a stay of execution before a panel of three justices and under civil reference system once an applicant files for a reference, the substantive application determined by a single justice is put in issue and becomes pending before the court.

Mr. Bazekuketta relied on the Supreme Court decision in Goodman Agencies Ltd vs. Hasa Agencies (K) Ltd, Civil Reference No. 1 of 2OLl for the proposition that when a reference is made, the substantive application from which it arises is put before court and the same application is fixed for hearing. Counsel submitted that they also filed an application for validation of the Civil Reference vide Civil Application No. 1062 of 2023 which is also pending before this court and argued that pendency of an application for leave does not affect an application for an interim order. 15 20

Regarding serious threat of execution, counsel submitted that the respondent has filed a bill of costs in High Court vide Taxation Application Number 158 of 2023 and the sarne has been fixed. Counsel argued that in the taxation application, the Respondent

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seeks over lbillion shillings in costs only. Counsel submitted that whereas the Respondent averred in the affidavit in reply that taxation does not constitute a serious threat of execution, the Supreme Court decided otherwise in the case of Osman Ramathan vs. Century

5 Bottling Company Ltd, Supreme Court Civil Application Number 35 of 2OL9. The Supreme Court held that execution is a process and not an event and one of the processes of execution is taxation of costs.

#### Respondent's submissions

10 In reply, Mr. Musinguzi submitted that the conditions for the grant of an interim order of stay of execution are that there should be a competent Notice of Appeal or competent reference , d substantive application and a threat of execution. Counsel argued that the Applicant filed an application for extension of the time to have filed 1s Reference Number 23 of 2023, which is supposed to be the basis of the application and submitted that civil reference No. 23 of 2023 is not competent before this court for having been filed out of time. Counsel relied on Rule 55( 1) of the Court of Appeal Rules Directions which provides that such a civil Reference has to be filed zo within a period of 7 days. In that regard, counsel submitted that there is no competent appeal before the court.

Counsel relied on the decision in Osman l(assim Ramathan Vs Century Bottling Company, Civil Application No. 34 of 2O19 in which the interim order dated 13th March 2O2O in Misc. Application 2s Number 35 of 2OL9, which was cited by Mr. Bazekuketta was

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vacated. Counsel argued that the Applicant had to attach Civil Application No. 1062 so that both the court and the respondent have an idea of the basis of the application so that court can ascertain whether it is actually frivolous or not.

5 While arguing the existence of a substantive application, Mr. Musinguzi submitted that the applicants do not have a substantive application in this case because Civil Application Number 1 13 of 2023 was heard and determined by Justice Oscar Kihika and as such, there is no pending substantive application from which the interim arises. 10

Counsel submitted that there is no threat of execution in the instant case. Section 38 of the Civil Procedure Act lists all manner of execution and does not include taxation of a bill of costs as a form of execution. Counsel relied further on the decision in Mohammed

Mohammed Hamid Vs Roko Construction Ltd, Misc. Cause No. 18 of 2OL7 for the proposition that taxation does not amount to a threat of execution and the court found that the applicant therein had not adduced any evidence of execution of the judgment. 15

# Applicant's submissions in rejoinder

Mr. Bazekuketta submitted that Civil Application Number 35 of 2OL9 Osman Kassim Rmathan Vs Century Bottling Company and Civil Application Number 34 of 2OL9 are two different applications. No. 34 of 2019 was a substantive application while No. 35 of 2Ol9 was the interim application and once a substantive application is determined, the interim order ceases to apply and that explains why 20 25

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it was vacated. That the order in Civil Application Number 35 of 2Ol9 was not vacated by a panel of three justices by way of reference.

Counsel submitted that the applicant's Civil Application Number 1062 of 2023 is for extension of time within andf or validation of Civil Reference No. 23 of 2023 and this application was alluded to by the Respondent in paragraph 1O of the affidavit in reply. In paragraph 1O of the affidavit in reply, the applicant stated that there is an application for extension of time within which to file the reference and reference was made to civil application number 1062 of 2023 and as such, the Respondent cannot deny that the application for extension of time does exist.

## Consideration of the Application

The jurisdiction of this Court to grant an order of interim stay of execution derives from Rule 2l2l and Rule 6 l2l of the Rules of this Court. Under these Rules, this Court is given wide powers to exercise its jurisdiction for the ends of justice. Okello, JSC set out the requirements which ought to exist before an interim stay of execution can be granted in Hwan Sung Industries Ltd V Tajdin Hussien and 2 others SCMA No. 19 of 2OO8 which was cited with approval in Francis Drake Lubega V The Attorney General & 2 others Supreme Court Misc. Application No.13 of 2O15; that for an application for an interim order of stay, it suffices to show that <sup>a</sup> substantive application is pending and that there is a serious threat of execution before the hearing of the pending substantive application. 15 20 25

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At this stage, it is not necessary to pre-empt consideration of matters necessary in deciding whether or not to grant the substantive application for stay.

The Supreme Court had earlier in Dr. Ahmed Muhammed Kisuule

5 V Greenland Bank (In liquidationf Supreme Court Civil Application No. 7 of 2OLO stated that for an application in this Court for a stay of execution to succeed the applicant must first show subject to other facts in a given case, that he/she has lodged an appeal.

#### <sup>10</sup> Notice of Appeal

The first consideration for court to grant an interim order of stay of execution is to ascertain whether the Applicant has filed a Notice of Appeal. The instant application arises out of Civil Reference No. 023 of 2023, which referred the decision of a single Justice in Civil Application No. 113 of 2023 to a panel of three Justices. The Applicant also filed Civil Application No. 1062 seeking to validate andlor extend time within which to file the Civil Reference No. 023 of 2023. The respondent contends that this application is incompetent before this court for reasons that the Civil Reference <sup>20</sup> from which it arises was filed out of time.

The Applicant has however filed an application for validation of the Civil Reference vide Civil Application No. LO62 of 2023 and alluded to the sarne in paragraph 1O of the Applicant's affidavit in support of the application. I note that the Respondent did not respond to paragraph 10 of the Applicant's affidavit in support, but the

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Respondent's counsel, in his submissions was able to refer to Civil Application No. 1062 which he rightly noted is an application for extension of time and not a substantive application for stay of execution.

- 5 This court in Krone Uganda Ltd Vs Kerilee Investments Ltd Miscellaneous Applications No. 66 and 67 of 2O2O was faced with a somewhat similar issue. In that case, the Applicant filed an application for stay of execution arising out of an appeal in which no right of appeal existed. the application arose out of an order granted - under Order 22 rule 23(3) of the Civil Procedure Rules which was not appealable to the Court of Appeal as of right. The applicant thus filed a Notice of Appeal, an application for leave to appeal and an application for an interim order of stay of execution. The learned Justice granted an order of stay of execution having considered that it suffices for there to be an application for leave to appeal pending 10 15

Likewise in G Vs C, Supreme Court Civil Application No. 03 of 2OL3, the Applicant filed an application for stay of execution and an application for validation of the appeal. The Respondent opposed the application for interim stay of execution on grounds that the application was not tenable since there was no Notice of Appeal filed in accordance with the Rules. Hon. Justice Katureebe, (CJ) (E) held as follows; 20

before court.

cal am sattstied that the applicant has tiled tuto applicatlons ln this court for stag of execution and for

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N aalldatton of the appeal that utas alreadg filed, tn thts cotttt. I cannot at thls stage lnqulre lnto thc merlts of those appllcatl.ons, but I am of the oplnlon that ln the lnterests of Justlce, theg should be lteard."

- 5 In l(atayira Francis Vs Rogers Bosco Bugembe, Supreme Court Civil Reference No. O9 of 2Ol7 the Applicant filed a Civil Reference against the decision of a single Justice dismissing and application for an interim order of stay of execution. In its ruling, the panel of three Justices of the Supreme Court held as follows; - nTlrc learned slngle Justlce utas allae to th.e co.se of Zubeda Mohammed (Supra) on whlch she heaullg relled. Howeaer, the learned Justlce delaed lnto matters, related to uthether the appllcant lwd an automatlc rtght of appeal and uthether the appllcant had an appeal at the Court of Appeal afier hls notlce had been stntck ottt. Respectfullg ute find those utere begond th.e scope of tlrc appllcatlon before her. She utent lnto the merlts of the appeal ln detennlnlng the appeal ltself." 10 15

In the sarne respect, the applicant before me has filed an application vide Civil Application No. 1062 of 2023 which he referred to in paragraph 10 of the affidavit in support to be an application for extension of time. 20

It is not necessaiy, in my view, for me to delve into the merits of the application for extension of time which will be heard by a fulI bench.

It is sufficient enough that the applicant has liled an application for 25

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extension of time and/or validation of the Civil Reference. I note that the Applicant has also filed a Notice of Appeal and a Memorandum of Appeal filed in this court in Civil Appeal No. 1 of 2023. I therefore find that the applicant has satisfied the first condition.

## s Existence of a substantive application for stay of execution

The Applicant's counsel submitted that the substantive application from which this application arises is Civil Application No. 113 of 2023. Haruna Sentongo Vs I& M Bank (formerly Orient Bank Uganda Ltdl, Civil Application No. 113 of 2or23 was heard and determined by this court before Hon. Justice Oscar Kihika. For proper determination of this element, it is necessary for me to go briefly into the reference system in this court, being an appellate court.

#### Rule 55 (U Fl of the Judicature Court of Appeal Rules Directions provides as follows; 15

## 55. Reference from declslon of a slngle Judge.

(1) Wlrcre under sectlon 12(2) of the Act, anu person belng dtssattsfied ulth tlrc declslon of a slngle Judge of the coutt-

(a) ...

b) fn ang clall matter utlshes to hoae ang order, dlrectlon or declslon of a slngle Judge aarled, dlscltorged or reoersed bg the court, the appllcant ntag applg for tt lnfortnallg to

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# the Judge at the tlme uthen the decision ls glaen or bg utrltlng to the reglstrar utlthln seaen dags afier that d.ate.

When a reference is fiIed under Rule 55 above, the application that was heard by the single Justice is placed before a panel of three justices. The Supreme Court clarified this principle in the case of Goodman Agencies Ltd Vs Hasa Agencies (Kl Ltd Civil Reference No. 01 of 2O11. The learned Justices of the Supreme Court held as follows;

The procedure uthlch is to be followed is as follows: Where an oral applicatlon for a reference is made before a slngle Judge, that Judge should pcss the file to Registrar utith dlrection tlwt the number of appropriate coples of pleadings and proceedlngs before hlm or her be produced so that the appllcatlon ts fi-xed for lrcaring bg three Justlces. Where an appllcatlon in urltlng ls made to tltc Reglstrar, the Reglstrar sho'll ensure tlut on approprlate number of coples of tltc pleadlngs and proceedlngs before the slngle Justlce is produced after uthich the appllcatlon is ft-xed for hearing. Thereaftnr the partles should be sented uttth hearing notlces. L0 15

In essence, a party filing a reference is not required to file a fresh application. The application that was determined by the single Justice is the very application placed before a panel of three justices. This essentially means that the application will now be pending before a panel. Civil Application No. 113 of 2023, which was

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determined by a single Justice is the sarne application that is now pending before a panel of three justices by virtue of filing Civil References No. 005 and No. 023 of 2023.

It is therefore my considered view that there is a substantive application pending in this court vide Civil Application No. 113 of 2023 which was placed before the panel by virtue of Civil Reference No. 023 of 2023.

#### Existence of a serious threat of execution

The Respondent contends that there is no threat of execution and that the Respondent has not taken any steps to execute the decree in Consolidated H. C. C. S No. 464 of 2018 and No. 036 of 2019. On his part, the Applicant alleges that the Respondent has filed a bill of costs in the High Court vide Taxation Application Number 158 of 2023 and the sarne has been fixed for hearing on 27th November 2023. 10 15

Both counsel had heated arguments on the applicability of Osman I{assim Ramathan Vs Century Bottling Company, Supreme Court Civil Application No. 35 of 2OL9, the application for interim stay of execution, and Osman l(assim Ramathan Vs Century Bottling Company, Supreme Court Civil Application No. 34 of 2Ol9 an application for a substantive application for stay of execution. Mr. Bazekuketta relied on Osman Kassim Ramathan Vs Century Bottling Company ,Civil Application No. 35 of 2Ol9 in which an interim order of stay of execution was granted by His Lordship Justice Ruby Opio Aweri (RIP). The Respondent, in that case, 20 25

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contended that there was no threat of execution in that mere taxation of costs did not constitute any threat of execution. His Lordship held that;

$\mathsf{S}$

"With greatest of respect, it is not true that taxation of costs is not a threat imminent or otherwise, of execution. $\Box$

Execution is a process and not an event. One of the processes of execution is taxation of costs. Execution in its widest sense signifies the enforcement of or the giving effect to the judgments or order of Courts of Justice. Blacks's Law Dictionary 5<sup>th</sup> Edition defines execution in the following terms:-

".................... it is the carrying out of some act or course of conduct to its completion and putting into force, completion, fulfillment, or perfecting of anything or carrying it into operation and effect".

It is clear from the above definition that taxation of costs is a process of law for the enforcement of or giving effect $\mathbf{r}$ to judgments or orders of a Court of justice and accordingly constitutes imminent threats to execution."

Mr. Musinguzi relied on **Supreme Court Civil Application No. 34 of** $20$ 2019 Osman Kassim Ramathan Vs Century Bottling Company and argued that the interim order in Civil Application No. 35 of 2019 was vacated and should no longer be an authority.

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For clarity, I must state that an interim order of stay of execution is granted by court pending the determination of the substantive application for stay. Thus, the validity of an interim order comes to an end when the substantive application is heard and determined by

- 5 the court. When the substantive application in Osman Kassim Ramathan Vs Century Bottling Company, Supreme Court Civil Application No. 34 of 2OL9 was heard by the panel, their Lordships dismissed the application and issued an order vacating the interim order as earlier granted by Justice Ruby Opio Aweri (RIP) in Supreme - Court Civil Application No. 35 of 2OL9. The order was vacated by the determination of the substantive application for stay of execution. I therefore do not agree with Mr. Musrngazi that the determination of Civil Application No. 34 of 2Ol9 rendered the ruling in Civil Application No. 35 of 2Ol9 unauthoritative. 10 - An interim order granted by a single Justice is only vacated when a party successfully files a reference to a panel against the decision of a single Justice and the sa-Ine is heard and determined or when the substantive application is determined by court. In the case of a reference, the decision of a panel replaces the decision of a single Justice and accordingly, the ruling of the single Justice is set aside and is therefore unauthoritative. On the other hand, the determination of the substantive application does not nullify the ruling of the single Justice but rather brings the life of the interim order to an end. The ruling of the single Justice remains authoritative as far as applications for interim orders are concerned. This means 15 20 25

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that the ruling in Civil Application No. 35 of 2OI9 is good law for reasons that no reference was filed against it.

In The Registered Trustees of The Hindu union Vs l{agoro Epimac and 2 others, Civil Application No 3O4 of 2OL7, this court, while granting an order of stay of execution, held that;

"Cottttsel has also extracted a decree arlslng from the so;ld Judgment and has fufther lodged a blll of costs for toxatlon pufposes in tlrc Htgh Cout't. In mg oplnlon, this ls belng done ln preparatlon for executlon of the anpard. I am satlsfied that speclal clrcum.stances exlst for tihe grant of lnterlm stag of executlon ln thls mo:tter."

It is my considered view that taxation of the bill of costs is the first step to realrzation of the fruits of a judgment. Execution without taxation would be premature. In the instant case, it is not disputes that the Respondent filed the bill of costs and the sarne has been fixed for hearing. I find that the Applicant has proved that there is a serious threat of execution. 15

In conclusion and for the foregoing reasons, I find that the Applicant has met the conditions for the grant of an interim order of stay of execution. I am fu1ly aware that Rule 2(21 of the Rules of this Court confers upon the court discretionary powers in the pursuit and fulfillment of the exercise of substantive justice. I therefore allow this application and make the follo\*ing orders; 20

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UW

- 1. An interim order is hereby granted staying the execution of the decree of the High Court (Commercial Division) in Consolidated Civil Suits No. 464 of 2018 and No. 036 of 2019 until the determination of Civil Reference No. O23 of 2023 and Civil Application No. 113 of 2023 by a bench of three (3) Justices of Appeal. - 2. The Applicant shall be required to comply with regulation 13(1) of the Mortgage Regulations No. 2/2O2L - 3. The Registrar of this court is directed to fix Civil Reference No. - O23 of 2023 in the nearest available session - 4. Each party shall bear its own costs.

Dated this r-f- day of I. Ig\At,^.,1""^-- 2023

<sup>15</sup> Signed

( t

Christopher Gashirabake JUSTICE OF APPEAL

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