Southern Investments Ltd v Mukaburura Foundation Investments Ltd (Miscellaneous Application No. 77 of 2007) [2007] UGCA 79 (29 June 2007)

Full Case Text

#### THE REPULIC OF UGANDA

## IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

# CORAM: HON. JUSTICE AMOS TWINOMUJUNI, JA ISINGLE JUDGEI

#### t0 MISCELLANEOUS APPLICATION NO.77 NO. 2OO7

#### SOUTHERN INVESTMENTS LTD AI)PI,ICAN'I'

# VERSUS

### MUKABURURA FOUNDATION INVESTMENTS LTD....... ............ ITESPONDIiN't

# RULING:

- 25 This is an application by Notice of Motion brought under Rules l(3), 42(l) & (2),43 and 104(3) Court of Appeal Rules. The application is said to be for orders that:- - (a) The respondent fumishes security for costs within a pcriod to bc determined by court in the sum of UGX 9,037,500/: (Ugantla shillings nine million, thirty seven thousand, five hundred only) failing which the appeal should be dismissed. - (b)The respondent fumishes further security lor costs rvithi thc period to be detem-rined by court in thc surn ol' (iX 20,000,000/: (Uganda shillings tu'enty nrillion only) l. ing rvhich the appeal should bc disrnisscd rvith costs. - (c) Costs of this application are provided lbr.

The application is supported by the affidavit of Mr. Habib Kagimu, the Managing Director of the applicant sworn on 29th June 2007. The affidavit outlines both the background and the grounds of the application. Here below I reproduce the $1^{st}$ eighteen paragraphs of the affidavit:-

1. THAT I am a male adult Ugandan of sound mind.

- 2. THAT I am a Director in the applicant Company herein, the defendant in HCCS No.79 of 2004 duly aware of the facts herein and duly authorised to depose this affidavit. - 3. That I know that the Respondent has appealed from the decision of the Hon. Mr. Justice Yorokamu Bamwine dated 20th December 2006. - 4. That to the best of my knowledge the respondent has no known assets or property in Uganda from which the applicant can recover its costs. - 5. That on the 9th day of November 2004 the Hon. Lady Justice Stella Amoko Arach granted the applicant unconditional Leave to appear and defend HCCS No.79 of 2004. - 6. That the respondent filed Civil Appeal No.4 of 2005 on the 25th January 2005 appealing against the orders of the Hon. Justice Arach in Misc. Application No.105 of 2004 arising from HCCS No.79 of 2004. (A copy of the Memorandum of Appeal is attached hereto as annexture "A"). - 7. That on the 16th day of June 2005 the said appeal was dismissed with costs by the Court of Appeal. (A copy of the decree is attached hereto as annexture "B"). - 8. That subsequently on the 17th day of June 2005 the respondent again filed in the High Court Misc. Application No.480 of 2005 arising from Misc. Application No.105 of 2004 from HCCS No. 79 of 2004 orders that they be granted an extension of time within which to apply for leave to appeal against the orde: dated 9th November 2004. (A copy of the application is attached hereto as annexture "C").

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- 9. That I am advised by the applicant's lawyers Ms Kiwanuka & Karugire Advocates which information I believe to be true that the respondent abandoned the said application. - 10. That the respondents on the 5th October 2005 filed Misc. Application No. 702 of 2005 arising from Misc. Application No.1004 of 2005 and HCCS seeking leave to appeal against the order date 9th November 2004. (A copy of the application is attached hereto as annexture ("D). - 11. That on the $28th$ November 2005 the said application was dismissed with costs by the Hon. Justice Y. Bamwine. - 12. That as a result of defending Civil Appeal No.4 of 2005, the applicant incurred costs which were taxed on the 9th November 2006 and allowed at UGX 2,523,000/= (Uganda shillings Two Million, Five Hundred Twenty Three Thousand Only) which costs to date have not been paid by the respondent in spite of demand for them to do so. (A copy of the Certificate of Taxation and notice of demand from Kiwanuka & Karugire Advocates is attached hereto as annexture ("E" & "F" respectively). - 13. That on the 20th December 2006 HCCS No.79 of 2004 was dismissed by the Hon. Justice Bamwine. (A copy of the decree is attached hereto as annexture "G"). - 14. That as a result of defending HCCS No.79 of 2004, the applicant incurred costs which were taxed on the 4th June 2007 and allowed at UGX 6,514,500/= (Uganda shillings Two Million, Five Hundred Twenty Three Thousand Only) which costs to date have not been pair by the respondent in spite of demand for them to do so. (A copy of the Certificate of Taxation and notice of demand from Kiwanuka & Karugire Advocates is attached hereto as annexture ("H" & "I" respectively). - 15. That I have been advised by the applicants Lawyers, M/s Kiwanuka & Karugire Advocates whose advise I verily believe to be true that the respondent's appeal has a very low chance of success.

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16. That this appeal process is a further expense on the applicant and there is little or no possibility of the applicant recovering costs incurred thus far and the costs of the appeal if the appeal is determined in the applicant's favour, from the respondent unless an order is made for the respondent to furnish further security for costs.

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- 17. That in light of past costs incurred in the sum of UGX 9,037,500/= (Uganda shillings Nine Million, Thirty Seven Thousand, Five Hundred only) and the value of the subject matter in this appeal, UGX $20,000,000/$ = (Uganda shillings Twenty Million only) as future costs, I believe that the sum of $UGX$ 30,000,000/= (Uganda Shillings Thirty Million only) would be just and reasonable in the circumstances of the case and that a period of two weeks be given for the respondent to furnish the security. - 18. That it is in the interest of justice that the respondent is ordered to furnish further security for costs of the appeal and security for past costs incurred and taxed in HCCS No.79 of 2004 and Civil Appeal No.4 of 2005 already awarded to the applicants."

The application first came before me for hearing on 20th September 2007 Mr. Blaise Babigumira who appeared for the respondent applied for 25 adjournment as he was not ready to proceed. Mr. Peter Kauma who represented the applicant did not oppose the application. It was adjourned to 15th October 2007.

On 15th October 2007 Mr. Thomas Ochaya for the applicant appeared in 30 court. He informed me that Mr. Babigumira had withdrawn from the case and he, Mr. Ochaya, had so far failed to trace the whereabouts of the He applied for permission to serve the director of the respondent. respondent by substituted service. I granted the application and ordered

service to be done by advertisement in NEW VISION Newspaper with a 35

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copy of it at the Court of Appeal Notice llcrard. [-hc lrcaring ol'thc application was adjourned to 30th October 2007.

On 30'h October 2007, Mr, Ochaya produccd proof that substitutcd service had been effected on the respondent in thc n'lanncr this cou( had ordered. The hearing proceeded in the absence of thc respondcut. Mr. Ochaya then outlined the circumstances that lcd to thc application ancl tlrc grounds for it. Most of what he said rvas a rccital ol'thc contcnts ol'thc affidavit of Mr. Habib Kagimu outlined above.

I have carefulty studied counsel for the applicant. the allidavit and the subrnissiorrs ol' leanrcd I arn satislicd ol'thc lirllorr irtg:-

(a) The respondent has been ltling nunrcrous applications urisittg liortt HCCS No.79 of 2004.

- (b)Most of these applications and appeals have been disnrissed rvith costs to the applicant. - (c) The respondent has not been able to pay any ol' thc costs arvarded to the applicant. The costs against the respondcnt now amounts to shs.9,037,500/:. - (d)The present whereabouts olthe respondent appcars to bc unknorvu. Even Mr. Babigumira, their forrner la\\,ycr statcd hcre in cou( that he does not know rvhcre to find his fornrer clicnts prcsently. 'l'hc respondent cornpany could be a bricl casc colnpany and nobodv knorvs rvhcre its headquaners are or u,hcthcr it has arrl,ilsscls in Uganda, 'l'he ow'ncr ol'thc companl, is saiti to bc nrostlv rcsidcrrt irr C.iibouti. - (e) The Court cannot corttirtuc to allo\* tltc lcsponclcrrt to incur e ()sts t(l the applicant when there is littlc or no lropc that thc costs rvill lrc

paid. There is now pending in this Court Civil Appeal No.11 of 2007. At the moment it is not moving because there is no one to move it.

(f) If the appeal is eventually allowed to continue, the applicant will incur further costs without any assurance that the respondent will pay in the event they loose the appeal.

In the result, I find that this is a suitable case to grant the relief sought.

ORDER: $10$

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- $1)$ It is ordered the respondent deposits in this court Ug.shs.9,037,500/ $=$ as security for costs already incurred by the respondent before Civil Appeal No.11 of 2007 is heard. - $15$

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2) It is ordered that the respondent deposits Ug.shs.20,000,000/ $=$ $(10\% \text{ of the suit value})$ as security for future costs.

3) The total amount of Ug.shs.29.037.500/= should be deposited in court within 30 days from today. If not paid as ordered, the applicant will be at liberty to move the court informally to dismiss the appeal.

4) The costs of this application are hereby granted to the applicant.

Dated at Kampala this. 15th Dated at Kampala this. 15th

25 Ton Justi $Km\ddot{o}$ TICE OF APPEAL SINGLE JUDGE $3($