Teopista & Jesus Holdings (U) Limited & Others v Cairo Bank Limited (Civil Application 561 of 2024) [2025] UGCA 202 (20 June 2025)

Full Case Text

# THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

**CIVIL APPLICATION NO. 0561 OF 2024**

(*Arising from Civil Appeal No. 0781 of 2024*)

(Arising from High Court Civil Suit No. 949 of 2022)

(Arising from Consolidated Misc. Applications No. 1605 &1606 of 2022)

1. TEOPISTA & JESUS HOLDINGS (U) LIMITED

- 2. NABBALE TEOPISTA - 3. MARIA NTEGANYI....................................

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**VERSUS**

CAIRO BANK LIMITED....................................

# RULING OF CHRISTOPHER GASHIRABAKE, JA (SINGLE JUSTICE)

#### **Introduction** 20

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[1] This application was brought under Rules $2(2)$ , $6(2)(b)$ ,43 and 44(1) of the Judicature (Court of Appeal Rules) Directions SI 13-10, for Orders that;

a. An Order for Stay of Execution of the partial decree issued by Hon. Lady Justice Harriet Grace Magala, Judge of the High Court, in *Misc. Applications Nos. 1605 and 1606 of 2022, both arising from* HCCS No. 949 of 2022, between the parties pending the hearing of Civil Appeal No. 0781 of 2024 pending before this Honourable Court.

- b. The Costs of this application be provided for. - [2] The application is premised on the grounds that: 30 - a. The applicants are aggrieved by the partial decree arising from the ruling and orders in Consolidated Miscellaneous Application Nos. 1605 and 1606 of 2022, which were delivered by Hon. Lady Justice Harriet Grace Magala, Judge of the High Court, both arising from HCCS No.949 of 2022.

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| 5 | b. l'he resporulent Jiled in the I ligh Court of Ugonda, Commerciul | |---|---------------------------------------------------------------------| | | Division, ('ivil Suit No.0949 of 2023 by Summary Procedure under | | | Order 36 Rule 3 qfthe Civil Procedure Rules. |

- c. l'he applicants Jiled in lTigh Courl oJ llgandct, Commercictl Division, Miscellaneous Applications Nos. 1605 and 1606 of 2022, respectively, arising from IICCS No.0919 o/' 2022, for leave to appear ond de.ferul IICCS No. 0949 of 2022 between the porties. T.he trial Courl consolidaled the two applicalions, which were heard ond delermined by the lower Courl, and a ruling wcts delivered on May t 7, 2023. - d. I'he lrisl Judge, IIon. Lady Justice llarriel Grace Magala, entered parliol Judgmenl/decree in the.follou'ing orders: that: - a) .ludgmenl is entered againsl the applicants /defendants.for lhe payment o/ Ugx. 5,038,066,702/ (Ilganda Shillings l.'ive billion, lhirty-eight million, sixly-six thousand, seven hundred ancl two). - b) 'l'he upplicants are granlad leave lo appear and de.fend the dif/erence o/ the claim against them by lhe respondent. - c) 7.he applicants shouldfile their Written Slatement of Defence within 11 (fourteen) days.from the date of delivery o/ this ruling. - d) 'l'he application is allowed, and costs shall abide by the lulclme oJ lhe main suil. - e. I'ha applicants .filed a Notice of appeal in the lower Court and the same vtas lodged in the Llourl oJ- lppeal of Uganda and a Memorandum of Appeal has sincs been.filed in the Court o/ Appeal a.s Civil Appeal No.0781 of 2021 ancl the some is pending beJbre thi.s Ilonourable Court. - .[. I.hat IIC(IS No. 0919 of 2022 bctu,een the pdrties is still pending heoring in the lower Court, by the orders of lhe lower Court stated in ground I above.

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- g. Civil Appeal No. 0781 of 2024 arising from the partial summary decree in HCCS No. 0949 of 2022 is pending in the Court of Appeal of *Uganda*. - h. The applicants filed in the lower Court, HCCS No.0949 of 2022, their *joint Written Statement of defence with Counterclaim.* - *i. The applicants lodged in the High Court of Uganda Miscellaneous Application No. 0950 of 2023, seeking orders for a stay of execution* of the orders of the said trial Judge arising from the consolidated *Miscellaneous Applications Nos. 1605 and 1606 of 2022.* - *j.* The above-stated application No. 0950 of 2023 was heard by the said trial Judge, Lady Justice Harriet Magala, Judge of the High Court of *Uganda and she dismissed that said application with costs.* - *k.* Due to the refusal of the grant of the order of stay of execution by the *lower Court, the applicants filed this application to stay execution of* the partial decree in HCCS No. 0949 of 2022, pending the hearing of the Civil Appeal No. 0781 of 2024, which is pending in this court. - That the respondents have since sped up the hearing of Execution *l*. Miscellaneous Application No. 257 of 2023 and the same is scheduled for $1^{st}$ October 2024. - m. Execution Miscellaneous Application No. 257 of 2023 is seeking to attach and sale property described as LRV 3271 Folio 6 Plot 3 Block / Martin Road Kampala, there by posing eminent threat to the applicants' property. - n. Civil Appeal No. 0781 of 2024 lodged by the applicants in the Court of Appeal of Uganda has high chances of success. - o. The applicants' appeal as against the respondent is not frivolous or *vexatious. That the said appeal was properly filed in this Court under* the hereinabove-cited provisions of the law. - *p. The applicants' appeal shall be rendered nugatory if this application* is not granted in the terms being sought therein, since the Execution Miscellaneous Application No. 257 of 2023 is about to be determined. - 3 | Page

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- 5 q. l'his application has been Jiled in rhis Iloruturable Courl without undue delay. - r. 'l'he respondent shull nol be prejudiced in any way when lhis applicolbn is granted to lhe appliconts with cost!;. - "'. 'l'he appliconts hava provided securityJbr the due perfbrmance oJ-the partial decree hy pledging property described l. RV 327 1 l;olio 6 Plot 3 Block locole d ul Marlin Roud, Kampala. - t. lt is just, .fair. equitable and in the inleresls o/ justice that this Ilonourable Court be pleased to grant lhis applicution in lhe orders being sought lherein .favour of the applicanl,t, u,ith costs. - [3] 'fhe application was opposed by the respondent through the affidavit of IIENRY KYASANKU, the head of legal and Company Secretary of the respondent. He averred that the application was without merit as the intended grounds ofappeal do not have any likelihood ofsuccess and it isjust intended to delay the dispensation ofjustice. It was further avelred that the application did not satisfu the requirements fora grant ofa stay ofexecution. 15 20

### Representation

[4] At the hearing of the Application, Ms. Lydia Tamale holding brief for Mikka Akineza, represented the applicants. The applicants were not in Court. Ms. Joan Nakanda representcd the respondent. Ms. Irene Mutinye, Head of Credit, was present on behalf of the respondent. The parties filed submissions.

# Ilricf facts.

[5]'l'he applicants were sued for the recovery of Ugx. 9,119,312,4331= arising from credit facility advanced to the I st Applicant under summary procedure provided for under Order 36 of the Civil Procedure Rules. The Applicants filed a Consolidated leave to appear and defend Civil Suit No.949 of 2022.

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The Consolidated Applications were partially granted and a partial summary in HCCS No.949 of 2022 for payment of UGX 5,083,066,702/ $=$ . The Respondent followed by filing Execution Miscellaneous Application No.257 of 2023 for attachment and sale of land described as LRV 327 1 Folio 6 Plot 3 Block/Martin Road located at Martin Road, Kampala. The Applicants filed HCMA Nos. 095 of 2023 for the stay of execution, which was determined in favour of the Respondent. The Applicants also filed Civil Appeal No.781 of 2024, which is pending before this Honourable Court. It is alleged that there is a threat of execution by the Respondent through sale by public auction arising from EMA No.257 of 2023. As a result of this, the Applicants filed this Application for stay of execution due to the imminent threat of execution as evidenced by the scheduled hearing of Execution Miscellaneous Application No.257 of 2023 on the 11th day of November 2024.

### **Submissions by Counsel for the Applicant**

[6] Counsel cited Rule $6(2)(b)$ of the Judicature (Court of Appeal Rules) 20 Directions, regarding the Jurisdiction of this Court in granting a stay of execution. Counsel cited Lawrence Musiitwa Kyazze v. Eunice Busingye, S. C. Civil Application No.18 of 1990, where it was held that an application of this nature must be made after a notice of appeal has been filed and the applicant should be prepared to meet the conditions including; - furnishing 25 proof of the fact that substantial loss may result to the applicant unless the stay of execution is granted; that the application has been made without unreasonable delay; and the applicant has given security for due performance of the decree or order as may ultimately be binding upon him. Counsel also relied on the decision in **Kyambogo University vs. Prof. Isaiah Omolo** 30 Ndiege, C. A. Misc. Civil Application No. 341 of 2013.

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- 5 [7] Regarding filing a Notice olAppeal, counsel submitted that it is not in dispute that the applicants lodged and served on the respondent a Notice of appeal dated the 29th day ol May 2023, endorsed by Court on the 16th day of September 2024 and servcd on the Respondent on the same day (l6th day of Scptember 2024). - [8] Counsel submitted that the applicants first fited I-ICMA No.0950 of 2023 for a stay of execution and it was dismissed. Counsel then filed the instant application a few days after the dismissal of HCMA No. 0950 of 2023 on the l3th day of August 2024. Counscl argued that the application was filed within 10 t Ic. - 15 [9] Conceming the appeal having a likelihood of success, counsel submitted that the Applicants have filed a Memorandum of Appeal which spells out the grounds ol appeal and hcncc proves that there is a likelihood of success of thc appeal. Counsel invited the Court to find so. - u0] Counsel submitted that whether or not an appeal will be rendered nugatory if a stay is not granted depends on whether what is sought to be stayed if allowed to happen witl be reversible, or if it is not reversible, whether damages will reasonably compensate the party aggrieved, or it is in thc public interest to grant a stay. - I II Counsel contended that their appeal will be rendered nugatory if this application for a stay ol execution is not granted, given that the execution process is underway. Thc Respondent has commenced the process of execution by seeking attachment and sale ofproperty described as LRV 3271 Folio 6 Plot 3 Block/Martin Road located at Martin Road, Kampala by filing and prosecuting Execution Miscellaneous Application No.257 of 2023 that is scheduled for the I I th day of November 2024.

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- 5 [ 2] Regarding imminent th already taken steps towards exe< warrant of attachment and sale r Plot 3 Block/Martin Road locater Miscellaneous Appl ications No.i reat, counsc I submitted that the Respondcnt has rution, as evidenced by seeking the grant of [lproperty described as LRV 3271 Folio 6 I at Martin Road, Kampala under Execution l.r, o, rorr. - [ 3] It was argued that the applir [un,, ,,und to suffer the loss ol-their prope(y stay must be grantcd to prcvent s and irreparable harm to their business if the execution proceeds. As such, a tuch losses. - Il4l It was submittcd that the I Honourable Court, LRV 327 I Martin Road, Kampala. whose Respondent. pplicants have furnished security beforc this olio 6 Plot 3 Block/Martin Road located at certificate of 'Iitle is in the custody of the - [ 5] Counsel submitted that th Respondcnt will not suffer undue prejudice by waiting for the determinati n of the Appeal. As such, it is just and equitable that thc stay be granted to prevcnt undue hardship to the Applicant s. - 20 [6] Counsel prayed that this c urt grants this application.

# Submissions by Counscl for thc Rcsrrondent

rry objection on the grounds that there is no the Memorandum of Appeal was served on as such, this application has no basis in law el cited I{ule 88(l) of the Court of Appeal ve the memorandum ofappeal and record of . of appeal and record of appeal were issued lber 2023 and served on the Respondent on l.ee (:) \*eeks out of time. [ 7] Counsel raised a prelimina valid appeal before this Court a! the Respondent out oltime and and cannot bc sustaincd. Couns] Rules that the Appellant is to sef submitted that the memorandum by the Registrar on 26th Septen 29th October 2024, more than th appeal within seven days after lodging them in the registry. Counsel

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# 5 Thc merits of thc Annlication

- [8] Counsel submittcd that in Lawrcnce Musiitwa Kyazze vs Eunice Busingye(supra), importing by reference from Order 43, Rule 4(3) of the Civil Procedure I{ulcs, SI.71-1, thc Suprcme Court provided the considerations that must be satisfied by the applicant before the Court grants a stay of execution. Counsel also cited Kyambogo University vs Prof Isaiah Omolo Ndiege(supra). - [9] Regarding whether the appeal is frivolous and vexatious, counsel submitted that on a factual basis, the debt is not disputed by the Applicants and the faiture by thc Applicants to pay thc outstanding debt is also not disputed, hence the partial decree in I-ICCS No.949 of 2022. Counscl argued that on the premises, it is only fair that this Court rejects the attempt to be embroiled in the Applicants' frivolous abuses of its process, and just like the Lligh Court has done with the other attcmpts by the Applicants to abuse its process, dismiss the present application with costs. - [20] Counsel submitted that the applicants have not demonstrated how their supposed appcal would be rendered nugatory if execution proceeds. Counsel further argued that it is a well-settled principle of the law that the loss of property that has been mortgaged to a financial institution cannot be considered a ground for "irreparable damage/loss" and as such the Applicants' appeal will not be rendered nugatory if the execution proceeds. 20 - [2]) It was submitted for the respondent that there is nothing in the Applicants' application or affidavit in support thereof to demonstrate that the Applicants stand to suffer any substantial loss beyond what every judgment debtor is necessarily subjected to, and that cannot be atoned for by an award of damages.

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[22) Counsel submitted that shown capacity to furnish th performance in the Alfidavit in LRV 3271 Folio 6 Plot 3 M available to them, having been that this application is without e Applicants havc neither furnishcd nor Respondent with any security lbr due upport of the Application, save for olfering n Road Kampala, which property is not rtgaged to the Respondent. Counsel prayed 10 erit and should be dismissed with costs.

# Consideration of the Court.

[23] The jurisdiction of this Cf Rule 6(2)(b) of the Rulcs olthis urt to grant a stay of execution is set out in Court, which provides that;

### "Rule 6, Suspensiott of sente ce a,td stoy of execuliun

2)Subjecr to subrule (l) ofthi rult, thc instilulio,l ol dt1 ultpaul :;hull not operate lo su.;'pend any nlence or t0 slay excctiion, bul the courl mov

(b)ln any civil proceedings, where u notice of appeal has been lodged in ctccordance v,ilh r le 76 o/'these Rules, order a stoy o/' execut ion, an inju ncl ion, lhe courl may lhink.jusl. or0slay of proceedings on .such lerms as

## Rule 76 Notice of qpeal in vil appeals

(l ) rlny person u,ho desires t appeal to the court shall give nolice in writing, which shall be I the I Iigh Court d in duplicate with lha ragislrar ol

(2) Every notice under subr e(l) of this rule shall, subject to rules 83 and 95 oJ these Rules, be lodgcd u'ithin .fourteen day.s a/ier the date of the decision against ich it is desired lo ultltcol

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5 (3) livery ruttice ofappeal shall slate whelher it is intended to appeal agoinsl lhe v'hole or part only of lhe decision; and where it is intended to appeol against a part only ofthe decision, it shall speciJy the parl complained of state the ocldre:;s Jbr service of lhe appellanl ond stote the names and addresses o.f all persons intended to be served wilh copies o/ lhe notice.

> (1) ll/hen an appeal lies only wilh leave or on a certificale thal a point oJ law oJ general public importonce is involved, it shall not be necessary to obtain the leave or certiJicate beJbre lodging the notice ofappeal.

(5) A notice o/ appeal shall be substantially in litrm D in the l,'irst Schedule to these Rules and shall be signed by or on behalJ of the appellant. "

l24l In Hon. Theodore Ssekikubo & Others vs. The Attorney Gcneral and Another, Constitutional Application No 06 of 2013, the Supreme Court laid down the principles to guide the Court in granting a stay of cxecution. It held that;

> "(l) 'l'hc upplication musl cslablish that his appeal has a likelihood oJ success, or a primo facie casc o/ his right to aPPeal.

> (2) lt must ulso be estuhlished rhat the lpplicant u,ill su./Jbr irreparablc dumage or that the appeal will be rendered nugotory iJ u stuy is not gt anled.

> (3) I/ I and 2 ubove have not heen established, the Court must consider where the balunce qfconvenience lies.

- (1) l'hut the tlpplicant must also eslablish thal lhe applicalion was instiluled wilhoul deluy. " - [25) 'fhe purposc of the grant of stay of execution is to help preserve the status quo until the mcrits of the appcal are handled by the full bench. This

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5 court has the task of establisl conditions for the grant of a stay ing whether the applicant made out the of execution.

- 126) I have carefully considetd the submissions of both counsel, the pleadings and the law. Counsel f]r the respondent contended that whcrcas the applicant had filed the Notice of Appeal in this Court, it did not serve the respondent with the Memorandufn of Appeal within 7 days as required under Rule 88 of this cour1. Upon reaping Rule 6(2) and 76 ol' the Rules ol this Court, it is not a requirement tha the applicant serve the respondent with the 7 days for an application for stay to be of the Rules of this Court, as long as the Memorandum of Appeal withi granted. According to Rule 6(2 15 applicant has filed thc Notice o[ anReal in accordance with Rule 76 of the Rules ol this Court, the Court lan exercise its discretion to grant a stay of cxecutlon - 127) It is not in dispute that the lppeal was filed according to Rule 76 of the rules of this court. I cannot. tf,"r{fo,". fault the applicant. - 20 [28] Regarding the likelihood of success of the appeal, which is the most important consideration in ,y ]i"\*, it must be satisfied. At this point, the Court is not interested in the mprits of the case per se. 1'he grounds in the Memorandum of Appcal are tha - l. 'l hc l,:urnad tr l.ludgc errccl in law und lttct in 25 holding that the applicants by signing lhe o//cr letter dared 2 l"' Oaoler, 201 9 and its aLklentlum daretl 2 5'h day of Seplem\$er 2020, wcrc presumed to have ,ought inrlrprn)rnl advice, understood ontl accepted the terms andl conrlitions spell therein, lhereby occusioning mi!carriage of ju.st ice. - The learned trilt Juag, erred in law and .fact and occasionetl o )i.rrorriog, of justice in holding that 2 the applicants cre c.stopped.fiom pleacling thut the

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*Respondent did not advise them to seek independent* legal advice.

- 3. The learned trial Judge erred in law and fact in *holding that the applicants conduct of seeking leave* to appear and defend HCCS No. 949 of 2022 based on illiteracy and respondent's failure to advise the applicants to seek independent advice was barred by the principle against approbation and reprobation, thereby occasioning a miscarriage of justice. - 4. The learned trial Judge erred in law and fact in *holding that the Applicants didn't have a prima facie* case, had not demonstrated triable issues and therefore had no defence, thereby occasioning a *miscarriage of justice.* - 5. The learned trial Judge erred in law and fact in holding that the Applicants admitted to being indebted to the tune of $Ugx$ 5,038,066,702/= without any unequivocal statement/evidence in their pleadings on the record of the Court, thereby occasioning a miscarriage of justice. - According to the Memorandum of Appeal the applicants have raised $[29]$ triable issues. It is therefore my opinion that the appeal is not vexatious. - On whether the applicants would suffer irreparable damages if the $[30]$ execution is not stayed, this decree concerns the monetary decree. The applicants have not adduced any evidence by affidavit that they would suffer irreparable damages. In Twongyeirwe Peter vs Muhumuza Peter, **Miscellaneous Application, No. 681 of 2021, the court held;**

"Satisfaction of a money decree does not ordinarily pose the danger of rendering a pending appeal nugatory. Where the respondent is not impecunious, as the remedy of restitution is available to them in the event the appeal is allowed. The

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presumption then is that payment made to the respondent in the execution of the decree will be reversible in the event of a successful appeal. If it is reversible, it has not been shown that damages will not reasonably compensate them or that it is in the $\frac{d}{dx}$ public interest to grant the stay."

- In this application, the applicants have failed to demonstrate that they $[31]$ would suffer irreparable damages if the stay is not granted and the appeal succeeds. Furthermore, the applicants have not demonstrated that the respondents cannot compensate them when the appeal is found in their favour - Since this is a decretal sum claimed from the applicants, the balance of $[32]$ convenience tilts towards the respondents. - I find that this application has no merit. It is hereby dismissed. $[33]$

# **Decision**

The application is accordingly dismissed, with costs in the cause.

I so order. 20

> $\frac{1}{2}$ day $\frac{1}{2}$ of Dated, signed and delivered at Kampala this ... 2025.

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**C. GASHIRABAKE**

JUSTICE OF APPEAL

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