Stanbic Bank Uganda Ltd v Atabya Agencies Ltd [2004] UGSC 37 (13 December 2004)

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)}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid11809628 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 IN THESUPREME COURT OF UGANDA \line HOLDEN AT MENGO \line Before: J. N. Mulenga J. S. C, sitting}{\b\lang1033\langfe2057\langnp1033\insrsid11809628 as a single judge. \line CIVIL APPLI}{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 CATION No. 31 of 2004 \line BETWEEN \line STANBIC BANK UGANDA LTD }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 = = = }{\lang1033\langfe2057\langnp1033\insrsid11809628 = = = = = = = = = = }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 = = = = }{ \b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 APPLICANT \line AND \line ATABYA AGENCIES LTD= }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 = = = = }{\lang1033\langfe2057\langnp1033\insrsid11809628 = = = = = = = = = = }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 = = = = }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 RESPONDENT \line }{\b\lang1033\langfe2057\langnp1033\insrsid11809628 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid11809628 {\b\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 RULING: }{ \b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 \line }{\lang1033\langfe2057\langnp1033\insrsid11809628 This is an e}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 x parte application for an interim order to stay execution of a High Court d}{\lang1033\langfe2057\langnp1033\insrsid11809628 ecree which was upheld in the Judgm}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 ent of the Court of Appeal in Civil Appeal No. 59/2004 dated 7}{\lang1033\langfe2057\super\langnp1033\insrsid7538600\charrsid11809628 th}{\lang1033\langfe2057\langnp1033\insrsid11809628 December 2004.}{ \lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 The application is brought under r. 1(3) of the Rules of this Court. It is by Notice of Motion supported by Affidavit. In his submission to me, Mr. Kategaya counsel for the }{ \lang1033\langfe2057\langnp1033\insrsid11809628\charrsid1925077 appellant}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 intimated that he also relies on rr. 5(2) (b}{\lang1033\langfe2057\langnp1033\insrsid11809628 ) and 46 (2) of the said Rules.}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 \line }{\lang1033\langfe2057\langnp1033\insrsid11809628 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid1925077 {\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 The back ground to this application is as follows: \line In HCCS No. 1197/99, the respon}{\lang1033\langfe2057\langnp1033\insrsid11809628 dent successfully sued Uganda Com}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 mercial Bank (UCB) for special and general damages. UCB}{ \lang1033\langfe2057\langnp1033\insrsid11809628 lodged a Noti}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 c}{\lang1033\langfe2057\langnp1033\insrsid11809628 e}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 }{ \lang1033\langfe2057\langnp1033\insrsid11809628\charrsid1925077 of}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 Appeal and at the same time applied for stay of execution pending appeal. The stay was granted upon the applic ant executing a guarantee to pay the decretal amount if the intended appeal is decided and determined in favour of the respondent. The applicant purporting to have merged with }{\lang1033\langfe2057\langnp1033\insrsid11809628\charrsid1925077 UCB}{ \lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 instituted Civil Appeal No. 69 of 2003 against the decision in HCCS No. 119 7/99. The appeal was struck out as incompetent. Thereupon the respondent moved the High Court for an order compelling the applicant to honour its guarantee and effect payment. The High Court granted the order, against which the applicant appealed to the C ourt of Appeal, in Civil Appeal No 59/04. Apparently, the applicant was again granted a stay of execution pending the appeal, on condition that it deposited into court a bank draft for}{\lang1033\langfe2057\langnp1033\insrsid11809628 the sum of Shs. 1,001,742,124/}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 =. It deposited a draft dated 19.5.04 \line }{\lang1033\langfe2057\langnp1033\insrsid11809628 \par }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 On}{\lang1033\langfe2057\langnp1033\insrsid11809628 7.}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 12.04 the Court of Ap}{ \lang1033\langfe2057\langnp1033\insrsid11809628 peal dismissed that appeal. On }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 8.12.04 the applicant lodged a Notice of Appeal against that decision. On the same day, the respondent\rquote s advocates wrote to the applicant\rquote s advocates intimating that upon dismissal of the appeal, the Commercial Court Registrar had released the bank draft to them but that upon presenting it for banking the draft was rejected for being stale. They demanded a replacement draft}{\lang1033\langfe2057\langnp1033\insrsid11809628 and gave the following notice -}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 \line }{\lang1033\langfe2057\langnp1033\insrsid11809628 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid11809628 {\lang1033\langfe2057\langnp1033\insrsid11809628 \'93}{ \b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 Unless we receive the same within 24 hours fr}{\b\lang1033\langfe2057\langnp1033\insrsid11809628 om 4.30 }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 p.m. today, we shall enforce the guarantee dated 24.7.03 against the bank at its further cost and expense.\'94 \line }{\b\lang1033\langfe2057\langnp1033\insrsid11809628 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid11809628 {\lang1033\langfe2057\langnp1033\insrsid11809628\charrsid1925077 On}{ \lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 9.12.04 the applicant filed Civil application No. 30/04 seeking an order of this Court to stay execution of }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 \'93 the decree in Court of Appeal Civil appeal No. }{\b\i\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 59 }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 of 2004\'94 }{ \lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 pending appeal. On 10.12.04 the applicant filed this ex-parte application for an interim order for stay of execution of }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 \'93 the decree of the High Court, Court of Appeal (sic) in Civil Appeal No. 59 of 2004. }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 Clearly, what the applicant needs is a stay of execution of the decree in HCCS No. 1197/99. \line }{ \lang1033\langfe2057\langnp1033\insrsid11809628 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid1925077 {\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 In presenting this application before me, Mr. Kategaya submitted that the applicant filed the application after lodging a Notice of Appeal in conformity with r. }{\i\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 5 }{ \lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 (2) (b) of the Rules of this Court, and that pursuant to r.46 (2) of the same Rules, a certificate of urgency was filed with this application. He argued that the threat by the respondent \rquote s advocates to enforce the guarantee made this application urgent. He also argued that because the decretal amount is colossal, there is danger that if it is paid the applicant may suffer irreparable loss, because in the event of the appeal succeeding, the applicant would most probably fail to recover the amount from the respondent whose w hereabouts are not known. He relied on the decision in }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 HORIZON COACHES LTD Vs. PAN AFRICAN INSURANCE LTD, Civil Application }{ \b\i\ul\lang1033\langfe2057\langnp1033\insrsid11809628\charrsid11809628 No. 20 of 20}{\i\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid11809628 2002}{ \b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 , }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 where my learned brother Kanyeihamba, JSC, held that \line }{\lang1033\langfe2057\langnp1033\insrsid11809628 \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid11809628 {\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 \'93 }{ \b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 where a Notice of Appeal, or an application or indeed an appeal is pending before the Supreme Court, it is right and proper that an interim order for stay of execution either in the High Court or any court, be granted }{\b\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 in the interest of injustice and to prevent the proceeding and any order therefrom of this court being rendered nugatory.\'94 }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 (emphasis is added) \line }{ \lang1033\langfe2057\langnp1033\insrsid11809628 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid11809628 {\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 I respectfully agree with that hold}{ \lang1033\langfe2057\langnp1033\insrsid11809628 ing. I made a similar decision }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 in }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 HORIZON COACHES LTD Vs. FRANCIS MUTABAZI & OTHERS, }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid11809628 Civil}{\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 }{ \b\i\ul\lang1033\langfe2057\langnp1033\insrsid4013432 Application No. 21/}{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 01. }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 Those decisions, however, should not be construed a s authority for the view that an interim order for stay will always be granted whenever a Notice of Appeal is pending in this Court. Such an interim order is granted under r. 1 (3) of the Rules of this court, on the grounds set out in that rule, namely if it is necessary for achieving the ends of Justice or to prevent abuse of the process of court. \line }{\lang1033\langfe2057\langnp1033\insrsid4013432 \par }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 I would reiterate here my view, expressed in }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 WILSON MUKIIBI }{ \b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid4013432 Vs.}{\b\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 JAMES SEMUSAMBWA }{ \b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid4013432 Civil}{\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 }{\b\i\ul\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 Application No. 9 of 2003 }{ \b\i\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 where }{\lang1033\langfe2057\langnp1033\insrsid4013432 I said -}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 \line }{\lang1033\langfe2057\langnp1033\insrsid4013432

\par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid4013432 {\lang1033\langfe2057\langnp1033\insrsid4013432 \'93}{ \b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 It is trite that an intention to appeal }{\b\i\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 per }{\b\i\lang1033\langfe2057\langnp1033\insrsid4013432\charrsid1925077 se}{ \b\i\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 }{\b\lang1033\langfe2057\langnp1033\insrsid4013432 is not a }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 ground for stay of }{ \b\lang1033\langfe2057\langnp1033\insrsid4013432\charrsid1925077 execution}{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 and instituting an }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid4013432 appeal does not operate as a stay of execution. A party seeking a stay of execution must satisfy the court that there is sufficient cause why the party with judgment shoul d postpone the enjoyment of its benefits. It is not sufficient for the judgment - debtor to say that he is vulnerable, because the successful party may take out execution proceedings. It must be shown that if execution proceeds there may be some irreparab l e loss caused. Secondly, it is a cardinal principle of our judicial procedure that, save in exceptional circumstances, every party to a dispute before court for hearing, must be given notice thereof and opportunity to be heard before the court adjudicates on the dispute. The court will proceed }{\b\i\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid4013432 ex parte }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid4013432 only when it is satisfied that proceeding inter partes is likely to defeat the ends of justice, or when the party given notice fails to avail itself of the opportunity to be heard\'94}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 . \line }{\lang1033\langfe2057\langnp1033\insrsid4013432 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid4013432 {\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 In that case I went on to hold that although r. 49 (2) of }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid4013432 the}{\i\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 }{\lang1033\langfe2057\langnp1033\insrsid4013432 Rules of this Court }{ \lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 excludes app}{\lang1033\langfe2057\langnp1033\insrsid4013432 lications for stay of execution}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 from applications that may be heard by a single judge, application for an interim order was not exclude}{\lang1033\langfe2057\langnp1033\insrsid4013432 d, But I hastened to add that \endash \par }\pard \s15\ql \li720\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\ipgp1\pararsid4013432 {\b\lang1033\langfe2057\langnp1033\insrsid4013432\charrsid4013432 \'93}{ \b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid4013432 invoking that int}{\b\lang1033\langfe2057\langnp1033\insrsid4013432\charrsid4013432 erim procedure must neither be }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid4013432 taken as an alternative to, or substitute for, the}{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 }{\b\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 procedure for obtaining a stay, which is envisaged under sub-rule (2), nor should it be used to negative the import of that sub-rule. The interim order ought to be made onl y in compelling circumstances, to prevent defeat of justice, and strictly pending ascertained hearing of a substantive application by the full Court\'94. \line }{\b\lang1033\langfe2057\langnp1033\insrsid4013432 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid4013432 {\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 I am still of the same view. \line }{ \lang1033\langfe2057\langnp1033\insrsid4013432 \par }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 In my opinion, the applicant in the instant application has not satisfied the conditions for being heard and granted the interim order ex parte. Much as there may be grounds to fear that execution proceedings may be eminent in view of the haste with which the respondent\rquote s advocates acted to obtain the bank draft, this application appears to me to be premature. I have not been shown that if the respondent is given opportunity to be heard in this application the objective will be defeated. I do app\rquote eciate that in view of the Court\rquote s calendar it may be several months before Civil Ap plication No. 30/04 is heard by a full bench. That however, is not ground for this application to be heard ex parte. On the contrary it makes it more prudent that the respondent should be heard, not only on the merits but even on possible conditions for a n interim}{\lang1033\langfe2057\langnp1033\insrsid4013432 order if deemed necessary. \line }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid1925077 {\lang1033\langfe2057\langnp1033\insrsid6838028 I }{ \lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 have considered if I should adjourn the application to be heard inter partes but have concluded that the better order is to dismiss the application and leave it to the applicant to elect between filing an inter part es application for the interim order and pursuing Civil Application No. 30/04, having regard to the circumstances that may develop hereafter. Accordingly I dismiss this application but make no order as to costs. \line }{ \lang1033\langfe2057\langnp1033\insrsid6838028 \par }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 DATED at Mengo this}{\lang1033\langfe2057\langnp1033\insrsid6838028 14}{\lang1033\langfe2057\super\langnp1033\insrsid6838028\charrsid6838028 th}{ \lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 day of December 2004. \line }{\lang1033\langfe2057\langnp1033\insrsid6838028 \par }{\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 J. N. Mulenga \line Justice of the Supreme Court \par }\pard\plain \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid1925077 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\lang1033\langfe2057\langnp1033\insrsid7538600\charrsid1925077 \par }}