Shell Bugolobi Limited v Bugolobi Properties Limited (Civil Suit No.837 of 1995) [1996] UGHC 6 (16 July 1996)

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THE REPUBLIC }{ \ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid16266109 OF }{\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 UGANDA \line IN THE HIGH COURT OF UGANDA AT KAMPALA}{ \b\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 \line }{\lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 }{\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 CIVIL SUIT NO. 837 OF 1995}{ \b\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 }{\b\ul\lang1033\langfe2057\langnp1033\insrsid2558123 \par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 Shell Bugolobi Limited :::::::::::::::::::::: Plaintiff}{\lang1033\langfe2057\langnp1033\insrsid9001354 \par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 }{\lang1033\langfe2057\langnp1033\insrsid9001354\charrsid2558123 Versus}{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 \line Bugolobi Properties Limited ::::: : }{\lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 ::}{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 : ::::::::: Defendant }{\lang1033\langfe2057\langnp1033\insrsid9001354 \par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 BEFORE: }{\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 The Hon. the Principal Judge - Justice J. H. Ntabgoba }{\lang1033\langfe2057\langnp1033\insrsid2558123 \par }{\b\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 }{\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 RULING: }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 \line In this case the applicant, Tarlochan Singh Nhajan has, by Chamber summons, applied for an order to stay execution of a c onsent judgment entered by the two respondents in H. C. C. S. NO. 837 of 1995. He alleges that on 14/12/93 he paid for 33% of the shares in the second respondent company, Bugolobi Properties, Ltd. He thereby became a shareholder and a Director in the company . He alleges that on 7/7/94 a meeting of the second respondent company, in his absence, purported to dismiss him from the company after it purported that he had forfeited his shares therein on the ground that he had failed to pay US$ 100,000.00. He says th at thereafter the second respondent company purported to have borrowed some money from the first respondent company. The two companies he says, concocted a Civil Suit (H. C. C. S. No. 837/95) between them and that they then entered a consent }{ \lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 judgment by}{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 which the chief Registrar of Titles was ordered to transfer the title of the second respondent to the first respondent.}{\lang1033\langfe2057\langnp1033\insrsid2558123 \par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 The applicant argues that as a shareholder in the second }{\lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 respondent.}{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 transfer of the land of the second respondent to the first respondent robs him of his }{\lang1033\langfe2057\langnp1033\insrsid2558123 interest in the land. He has fi}{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 led another suit, namely H. C. C. S. NO.134 of 1996 in which he seeks an order to set aside the consent judgment in H. C. C. S. No 837/95, and to also set aside the decree therein as well as the vesting order. He argu es that if the execution in H. C. C. S. NO. 837/95 is not stayed until the final determination of H. C. C. S. NO. 134/95, that suit will be made nugatory and he will suffer irreparable damage and loss.}{\lang1033\langfe2057\langnp1033\insrsid2558123 \par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 \line Clearly, it can be seen that the applicant was not party to \line H. C. C. S. No. 837/95 or to the consent judgment. Mr. Byenkya, learned Counsel for the respondents raised an objection in which he argues that the applicant has no locus standi to bring the application since he was not party to the suit the execution wher eof is to be stayed if the application were to succeed. \par \line In the first place, Mr. Babigumira learned Counsel for the applicant, had filed his application pursuant to Order 19 rule 26 of the C. P. Rs and S.l0l of the C. P. A. He sought to amend the application by deleting Order 19 rule 26 of the C. P. Rs because, according to him, and Mr. Byenkya appears not to differ, that rule applies where the applicant was party to the suit whose execution is being sought to be stayed. The rule provide that:\'93Where }{ \i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 a suit is pending in any Court against the holder of \line a decree of such Court }{\i\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 in the name of the person against whom the decree was passed, }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 the Court may, on such terms as tp security or otherwise, as it thinks fit, stay execution of the Decree until the pending Suit has been decided.\'94 }{\i\lang1033\langfe2057\langnp1033\insrsid2558123 \par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 I do agree that since the applicant, in the instant application, is not }{\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 the person against whom the decree in H. C. C. S. NO. 837/95 was passed, }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 he cannot proceed under Order 19 rule 26 of the C. P. Rs. Mr. Byenkya further thinks that even S. l01 of the C. P. A. would not apply since the applicant was not party to the suit (}{\lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 i.e.}{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 H. C. C. S No. 837/95). He says that the Supreme Court, in Lawrence Musitwa Kyazze - }{\lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 vs. Eunice}{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 Businge, Civil Application No. 18/90 laid down three steps the court should follow when using its inherent jurisdiction to set execution. I have read the decision in that case at page 9 of the judgment. }{\lang1033\langfe2057\langnp1033\insrsid2558123 T} {\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 he Court was resolving \'93the ambiguity in favour of the express powers in the Supreme Court, without a mandatory limitation upon t hose powers as expressed by Rule 41. The Court then had this to say, which, I think is the relevant portion of its judgment, as far as our present arguments are }{\lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 concerned:}{ \lang1033\langfe2057\langnp1033\insrsid2558123 \par }{\lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 \'94 The}{\lang1033\langfe2057\langnp1033\insrsid2558123 }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 practice that this }{ \lang1033\langfe2057\langnp1033\insrsid2558123 Court should adopt, is that in }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 general application for a stay should be made informally to the judge who decided the case }{ \ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 when judgment is delivered. }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 The judge may direct that a formal motion be presented on notice (Order XLVIII rule 1), after notice of appeal has been filed. He may in}{\lang1033\langfe2057\langnp1033\insrsid2558123 }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 the meantime grant a temporary stay for this to be done. The parties asking for a stay should be prepared to meet the condi}{\lang1033\langfe2057\langnp1033\insrsid2558123 tions set out in Order XXXIX }{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 Rule 4(3) of the Civil }{\lang1033\langfe2057\langnp1033\insrsid2558123 Procedure Rules. The temporary }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 application may be e}{ \lang1033\langfe2057\langnp1033\insrsid2558123 x parte. If the application is }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 refused, the parties may then apply to the Supreme Court under Rule 5(2) (b) of the Court of Appeal Rules where again they should be prepared to meet conditions similar to those set out in Order XXXIX Rule 4(3). However, }{ \ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 there may be circumstances when this Court will intervene to preserve the status quo.\'94 }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 The above cited words of the Supreme Court are nothing more than a statement of procedure to be adopted by this Court, failure of which the Supreme Court, in which an appeal is pending, steps in to play the role that this Court would have otherwise played. But the procedure is followed where a party aggrieved in this Court wishes this Court to stay execution of its judgment and decree pending an appeal to the Supreme Court. Those words, if read carefully , }{\lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 emphasize}{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 the importance of doing justice - the concept of the provisions of S.3(2) (c) of the Judicature Act, 1967 (which has been retained verbatim by the new Judicature Statute 1996, and which provides that:}{\lang1033\langfe2057\langnp1033\insrsid2558123

\par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 \'93Where }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 no express la}{\i\lang1033\langfe2057\langnp1033\insrsid2558123 w or rule is applicable to any }{ \i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 matter in issue before the High Court subject to the provisions of the constitution }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 and }{ \i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 of this (statute], the jurisdiction of the High Court shall be exercised }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 }{ \i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 in conformity with the principles of equity and good conscience.\'94 }{\i\lang1033\langfe2057\langnp1033\insrsid2558123 \par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 This }{\lang1033\langfe2057\langnp1033\insrsid2558123\charrsid2558123 provision}{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 is ve ry important in that it empowers the High Court to use its discretion by applying procedures which it may deem necessary for the ends of justice to be met. These powers are broadened by the provision of the constitution in Article 126(2) (e) that:}{ \lang1033\langfe2057\langnp1033\insrsid2558123 \par In }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 adjudicating cases of both a Civil and Criminal nature, the Courts shall, subject to the law, apply the following principles: }{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 - \line }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 (a).... (d) \line (e) Substantive justice shall be administered without due regard to technicalities.\'94}{ \i\lang1033\langfe2057\langnp1033\insrsid2558123 \par }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 I should also refer to the word}{\lang1033\langfe2057\langnp1033\insrsid2558123 s of Wambuzi, President of the }{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 Court of Appeal (as he then was) in the case of }{\lang1033\langfe2057\langnp1033\insrsid2558123 Mugenyi & Co. }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 Advocates - vs - National Insu}{\lang1033\langfe2057\langnp1033\insrsid2558123 rance Corporation (unreported, }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 Civil Appeal No. 13/1984 that:}{\lang1033\langfe2057\langnp1033\insrsid2558123

\par }{\i\lang1033\langfe2057\langnp1033\insrsid15734529\charrsid15734529 I}{\lang1033\langfe2057\langnp1033\insrsid2558123 }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 think it is well estab}{ \i\lang1033\langfe2057\langnp1033\insrsid2558123 lished that the High Court has }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 inherent jurisdiction }{\i\lang1033\langfe2057\langnp1033\insrsid15734529 to stay any of its orders, see }{ \i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 Joanita Kaggwa }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 - }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 vs }{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 - }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 Olive Amelia Kawalya Kaggwa \line (Administration Cause N}{\i\lang1033\langfe2057\langnp1033\insrsid15734529 o. 21 of 1972 (1972) ULR 129; }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 Ujagar Singh }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 - }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 vs }{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 - }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 R}{\i\lang1033\langfe2057\langnp1033\insrsid15734529 unda Coffee Estates Ltd (1966] }{ \i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 E. A.263).\'94 }{\i\lang1033\langfe2057\langnp1033\insrsid15734529 \par }{\i\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 \line }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 What all this boils down to is that this court cannot}{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid15734529 }{\lang1033\langfe2057\langnp1033\insrsid15734529 s}{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid15734529 it}{\b\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 }{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 helplessly where no specific provision is provided in the law for a procedure to be followed. This Court will always be guided by the principles of equity, justice and good conscience to provide itself wit h a procedure for the ends of justice to be achieved.}{\lang1033\langfe2057\langnp1033\insrsid15734529 \par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 In this case, although the applicant was not party to the consent judgment and decree, which he seeks to be stayed, if he can show that such consent judgment and decree had the effect of prejudicing hi s rights and interests, he is free to invoke the wide inherent powers of this Court to come to his aid. He has shown that his 33% of the shares in the second respondent company are to be lost if the company is sold or transferred to the first respondent c o mpany. He has alleged that he was ousted from the second respondent company by fraudulent allegations. He says that in fact H. C. C. S. No. 837/95 was concocted so as to defeat his interest in the second respondent company. He has made other allegations. Tho s e allegations may be found to be true or false. What is important in this application, however, is that he should be given an opportunity to prove the allegations. He should not be denied such opportunity. It would be inequitable to deny it to him. This i s a proper case in which this Court should apply its inherent jurisdiction to allow him put in an application under S.lOl of the Civil Procedure Act. Accordingly I allow his oral application and a date}{\lang1033\langfe2057\langnp1033\insrsid15734529 will be fixed for hearing his }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 substantive application, namely, for stay of execution in H. C. C. S\\ t No. 837/95, including restraining the Chief Registrar of Titles from registering the transfer of any piece of land from the second respondent to the fir}{\lang1033\langfe2057\langnp1033\insrsid15734529 st respondent company. Order accor}{ \lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 dingly.}{\lang1033\langfe2057\langnp1033\insrsid15734529 \par }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 J. H. NTABGOBA \line }{\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 PRINCIPAL JUDGE}{\ul\lang1033\langfe2057\langnp1033\insrsid15734529 . \par 16/7/96}{\ul\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid2558123 \line }{\lang1033\langfe2057\langnp1033\insrsid2117917\charrsid15734529 \par }}