Tropical Bank Limited v Musoke & Another (Civil Application 278 of 2024) [2024] UGCA 241 (5 September 2024)

## <sup>5</sup> THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT KAMPALA CIVIL APPLICATION NO. 278 OF 2024 (Arisingfrom MA No. 219 of 202 I ) (Arisingfrom Civil Suit No. 191 of 2016) BETWEEN TROPICAL BANK LIMITED,................. ...... APPLICANT 10

VERSUS

I. JENNIFER K MUSOKE

- 2. PATRICIA KYAMBADDE ... RESPONDENTS

# RULING OF CHRISTOPHER GASHIRABAKE. JA (SINGLE JUSTICE)

### Introduction

| 20 | I .l This application was brought under Sections 10 and I 2 of the Judicature Act | |----|-----------------------------------------------------------------------------------| | | Cap 13 and Rules 2(2), 6(2)(b),43(l), and (2) of the Judicature (Court of | | | Appeal) Rules SI l3-10, for Orders that; | | | a. An order issue to stay execution of the .judgment, Orders, and | | | Decree in Civil Suit No. 491 of 2016 pending the determination of | | 25 | Court of Appeal Application No.249 of202l for leave to appeal | | | out of time. | | | b. Costs ofthis application be providedfor. | | | 2.1 The application is premised on the following grounds: | | | o. Judgment in HCCS No. 491 of 2016 was entered in favour of the | | 30 | Respondents on 24th February 202 l. | | | b. The Applicant being dissatisfied with the judgment filed | | | Miscellaneous Application No.219 of 2021 for leove to appeal out of | | | time. | | | |

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- <sup>5</sup> c. The soid Applicant's Miscellaneous Applicalion No. 219 of 2021 is yet to be heard and determined. - d. That the Respondents have commenced execulion of the decree in ttCCS No. 191 of 2016 - e. That in case the Respondenls proceed with execulion of the decree, it will render the Applicanr's applicstion.for leave to appeal out qf rime nugatory hence causing the Applicant lo su.ffer substantial loss. - f. The Applicant's intended Appeal has high prospects ofsuccess. - g, lt is just and equitable that the Application is granted. - 3.] The application was opposed by an affidavit sworn by Ian Mbuga Kazibwe on the grounds that there was no appeal since there was no valid Notice of appeal filed in Court and hence no likelihood ofsuccess. - 4.] In rejoinder, it was avered by Mr. Bamweyana Asuman that there was no dilatory conduct in handling the appeal and procuring thejudgment and typed record of proceedings since IWs Nakazzi Advocates & solicitors were handling the instructions. He further averred that when he realized that M/s Nakazzi Advocates & Solicitors had not taken steps he instructed IWs Kaweesi & Partners to institute an appeal on 23'd August 2021. An application for extension of time was filed on the I 7m of September 2021, however, it is yet to be heard. Bamweyana further avers that before the application could be heard, the Respondents had commenced execution proceedings against the Applicant. The Respondents had amended the warrant of attachment and sale of moveable property on the 23'd of May 2024. The Respondents have also impounded a motor vehicle belonging to the Applicant and have adveftised it for sale. - Representation 30 - 5.1 Mr. Dennis Kyewalabye represented the Applicant. Mr. Paul Muhimbura represented the Respondents. The parties filed written submissions.


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### Submissions for the Applicants

- 6.] Counsel for the Applicant submitted that it is a general rule that where the unsuccessful party is exercising their unrestricted right of appeal, the court has to make such orders to stay proceedings to prevent the appeal from being rendered nugatory. Counsel cited the Supreme Court decision in Lawrence Musiitwa Kya,ne v Eunice Busingye, SCCA No. 18 of 1990(1992) lV KALR 55. - 7.1 Counsel cited Rule 6(2) (b) of the Rules of this court as the law that governs the grant of Stay of execution. Counsel cited Hon Theodore Ssekikubo & Ors v Attorney General & Ors, Constitutional Application No. 03 of - 2014. Court laid down the principles to guide the Court in granting stay of execution. It held that;

"(l) The applicant must establish that his/her appeal has a likelihood o.f success: or a prima.facie case of his right to appeal

(2) It must also be estahlished that rhe Applicant \*,ill suffer irreparable damage or that the appeal will be rendered nugatory if a stay is not granted.

(3) If I and 2 above have not been established, the Court must consider where the balance ofconvenience lies.

(4) Thal the Applicant must also establish that the application was instituted wilhout deIay. "

- 8.1 Counsel submitted that this Court has to establish that the applicant has satisfred the above principles before granting the stay of execution. - 9.] Counsel for the Applicant submitted that the Applicant filed a Notice of Appeal out of time and Miscellaneous Application No. 249 of 2021 for leave to appeal out of time. Counsel cited Haruna Sentongo v I&M Bank Limited (Formerly Orient Bank (U) Limited) Civil Application No. 1069 of 2023,

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- where the court noted that it was sufficient that the Applicant had applied for an extension of time and filed a Notice of Appeal. - 10.1 Counsel submitted that there is a likelihood of success of the appeal. Counsel submitted in paragraph 22 of the Affidavit in support, that the Judge wrongly applied principles relating to judicial notice and general damages. Counsel submitted that the Applicant would suffer irreparable damage if the stay is not granted. Counsel submitted that examining the mafter in terms of the balance of convenience was unnecessary.

<sup>I</sup>l.] Counsel submitted that the Court should exercise its discretion and grant an order for a stay of execution of the Judgment and orders in High Court Civil Suit No. 494 of 2016 pending the determination of the Appeal.

### Submissions for the Respoldent

- 12.) Counsel stated that consideration for the grant of stay ofexecution was stated in Kyambogo University v Prof Isaiah Omolo Ndiege ,CACA No. 340 of2013 and Baguma Patrick v Sanyu Phiona CACA No. 452 2023. - 20 13.] Counsel submitted that according to Rule 76( 1) of the Judicature (Court of Appeal Rules) Directions, a Notice of Appeal was to be filed on the24th February 2021, the Applicant however filed 7 months later on the 7th September 2021. Counsel argued that the Applicant applied for leave to extend time which has not been heard by the Court of Appeal, Civil Application No.249 of 2021. )q - 14.) Counsel submitted that the alleged appeal is an afterthought intended to delay the Respondents from enjoying the fruit of their judgment, yet the application for validation has not yet been heard. Counsel cited Nestor Gasasira Machumbi v Zia Uwera Murekatete, Court of Appeal Civil Application No. 282 of 2021, where the court was constrained to grant the application because there was no valid Appeal pending before the Court.

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- <sup>5</sup> 15.] As regards whether the appeal was not frivolous and had a likelihood of success, counsel submitted that the Court must be satisfied that the Appeal was not Ilivolous and has a likelihood of success. Counsel argued that the appeal can be considered frivolous if the grounds intended to be raised are without any reasonable basis in law or equity. Counsel cited Commissioner Customs Uganda Revenue Authority v Kayimba, CACA No. 62 of 2014, counsel argued that in this case there is no way it can be said that the Appeal which does not exist has a high chance ofsuccess since the Applicant has not filed a Notice of Appeal . 10 - 16.] Counsel argued that substantially the Applicant must establish other factors that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the Applicant as the successful party in the Appeal. The loss ought to be of the nature that cannot but undone once inflicted. Counsel cited Formula Feeds Ltd & 3 Ors v KCB Bank Ltd ,Misc. Application No. 1647 of 2023. Counsel argued that the court ought to balance the interest ofthe applicant who is seeking to preserve the status quo pending the hearing of the appeal so that his or her appeal is not rendered nugatory and the interest of the Respondent who is seeking to enjoy the fruits of his or her judgment. 15 20 - 17.1 Counsel submitted that the application was brought after 7 months which was an inordinate delay. - 18.] On security for due performance, counsel submitted that the Applicant needed to fumish security for due performance. Counsel argued that the Applicant has not committed to fumishing security for due performance. - 19.] Counsel submitted that there is need to balance or weigh the scales of justice by ensuring that an appeal is not rendered nugatory while ensuring

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that a successful party is not impeded from the enjoyment of the fruit of his or her judgment.

20.) Counsel argued that apart from allegations that the Applicant would suffer irreparable damages, he has not adduced evidence to this effect.

### Submissions in rejoinder

- 10 15 20 <sup>21</sup>.) Regarding the Notice of Appeal, counsel submitted that there are several authorities by the Court ofAppeal and the Supreme Court to the effect that a Notice of Appeal and an Application for leave to appeal satisfu the condition of lodgment of an Appeal. Counsel cited G v C, Supreme Court Civil Application No. 03 of 2013, where the court was satisfied that the Applicant had filed two applications in this court for a stay of execution and for validation of the appeal that was already filed in this court. The court granted the stay of execution. Counsel submitted that the Applicant in this case filed the Notice of Appeal and also filed Miscellaneous Application No. 249 of 2021 for leave to appeal out of time which will validate the Notice of Appeal. Counsel stated that based on the Supreme Court decision, the application was valid. - 22.) Regarding the likelihood of success, counsel submitted that the Applicant lodged a Notice of Appeal and leave to appeal out of time. The Applicant aftached a copy ofthe Judgment and indicated its intended grounds of appeal based on this judgment which is sufficient to enable the court to assess the appeal's likelihood ofsuccess. Counsel cited Registered Trustees of the Hindu Union v Kagoro Epimac and 3 others, Court of Appeal Civil Application No. 304 ol 2017. Where court faced similar facts where the Applicant had filed a Notice of Appeal and a letter requesting for a record of proceedings. - 30

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23.1 The applicant reiterated its main submissions on irreparable damage.

6lPage - 24.1 Regarding the bringing of an application for stay without unreasonable delay, counsel submitted that while it is true that the legal department of the Applicant represented the Applicant in the main suit, the instructions to appeal were given to M/s Nakazzi Advocates & Solicitors immediately after the judgment had been detivered on 25'h February 2021. The Applicant further stated that the Applicant's former lawyers were negligent which explains why the Appeal was filed out of time. 10 - 25.1 Counsel noted that it was settled that where a litigant entrusts their case with their former lawyers, they ought not to be punished for the error, omission, and negligence of their former lawyers. Counsel submitted that the delay was justified according to Capt. Philip Ongom v Catherine Nyero Owoto, Supreme Court Civil Appeal No. 14 of 2001. Counsel submitted that the Applicant's Appeal was not an afterthought since the Applicant on realizing the negligence of IWs Nakazzi Advocates and Solicitors immediately instructed another firm lv{./s Kaweesi & Partners Advocates. The Applicant should not be blamed for the delay. - 26.) Counsel acknowledged that the Applicant had not furnished secwity for the due performance of the decree. Counsel argued that there is no indication that the Applicant by its status is incapable of paying the decretal sum and costs after the appeal is heard. Counsel argued that furnishing of security for costs is at the discretion of the Court. Counsel cited Abid Alam v Windriver Logistics Limited, Misc. Application No. 219 of 2021. Counsel submitted that this should be left to the court to exercise its discretion.

27.] As regards imminent threat of execution, counsel submitted that there is evidence of warrant of attachment. The Respondent attached the Motor vehicles of the bank and assorted fumiture from banking halls and offices

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which have an effect ofbringing the bank activities to a standstill. Ifa stay of execution is not granted, the Respondents will conclude the execution process by successfully recovering the decretal sum yet the Appeal which has a high likelihood of success will still be pending. Counsel submitted that there exists an imminent threat that warrants an order for a stay of execution. Counsel prayed that the Court should exercise its discretion to grant the application. 10

## Consideration of Court.

- 28.] The purpose of the grant of stay of execution is to help preserve the status quo and then have the merits ofthe case to be handled by the full bench. This Court has the task of establishing whether the Applicant has made out the conditions for the grant of stay of execution. - 29.) The jurisdiction of this Court to grant a stay of execution is set out in Rule 6(2) (b) of the Rules of this Court which provides that:

"2. Subjecl lo sub-rule (l), the institution of an oppeal shall not oryrole lo suspend any senlence or sloy execution but the Court may:

b) in any civil proceedings, v)here a notice of appeal has been lodged in accordance with rule 76 of these Rules, order a slay of execution..-. ..-..on such terms as the Court moy lhinkjusl".

30.1 This rule and rule 2 (2) give this Court, the discretion, in civil proceedings, where a Notice of Appeal has been lodged following rule 76 of the Rules of this Court, to order a stay ofexecution in appropriate cases and on terms that it thinks fit. This discretionary power must not be exercised capriciously or whimsically but must be exercised in a way that does not prevent a palry from pursuing its appeal so that the same is not rendered nugatory should the appeal overtum the trial court's decision.


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<sup>5</sup> 31.] Rule 76 of the rules of this Court on Notice of appeal in civil appeals, provides thus;

> (1) Any person who desires lo appeal to lhe court shall give nolice in wriling, which shall be lodged in duplicate with the regislrar ofthe High Courl.

> (2) Every notice under subrule (1) of this rule shall. subject to rules 83 and 95 of these Rules, be lodged within.fourteen dqys a.fter the date o.f lhe decision apainst which il is desired lo aopeal .kmphosis mine )

> (3) Every notice of appeal shall state whether it is inlended lo appeal against the whole or part only of the decision; and where it is inlended to appeal against a parl only of the decision, it shall specify the part complained of, state the address for service of the appellant and state lhe names and addresses of all person.s intended to be served with copies of the notice.

> (1) Wen an appeal lies only wilh leave or on a certiJicate that a point of law ofgeneral public importance is involved, it shall nol be necessary lo oblain the leave or cerlificate before lodging the notice ofappeol.

- (5) A notice ofappeal shall be substantially in Form D in the Firsl Schedule to these Rules and shall be sigted by or on behalfofthe appellant. - 32.) To establish whether there is a likelihood of success, this court was invited to interrogate the fact whether the Appeal had been lodged according to Rule 76 of the Court of Appeal rules. This was emphasized in Kyambogo University v Prof Isaiah Omolo Ndiege (supra). Rule 76 (2) requires that a Notice of Appeal is lodged within 14 days after the date of the decision against which it is desired to Appeal. According to the record HCCS No. 494 of 2016 was delivered on the 4th of February, 2021 in favour of the respondent. The Notice of Appeal was lodged on the 1 7th of September 202 <sup>1</sup> seven months after the judgment was made. It is evident that this application had not been heard by this court. However, the Supreme Court in G V C (Supra) court held that it satisfactory that the Applicant had filed an

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<sup>5</sup> application to validate the Appeal. Court noted that it was not its role to inquire into the merits of the application of validation at that stage.

- 33.1 Regarding the liketihood of success, the Applicant lodged a Notice of Appeal and memorandum of appeal indicating the likely grounds of appeal, if it is validated. - 34.1 As regards, the delay, the Applicant clearly explained that they entrusted the lawyers with the case and they acted negligently. It has been held by this Court and the Supreme Court that the negligence ofthe advocate should not be visited on the litigant. See Capt. Phillip Ongom vs Catherine Nyero Owolo (supra) 10 - 35.] The grant of an application for stay by the Court is discretionary. However, the discretion should be exercised judiciously. 15 - 36.1 In Nestor Machumbi Gasasira v Uwera Murekatete (supra), court declined to grant the stay because the applicant had made no effort or failed to validate the notice ofappeal . For the present case ,the applicant explained that the matter of appeal was entrusted with the private counsel who did not file the appeal. It is therefore distinguishable. - <sup>37</sup>.l <sup>I</sup>am therefore of the view;

a) That this is a case where court should exercise its inherent power under Rule 2(2) of the Rules of the Court to grant a stay of execution until the appeal is determined.

b) The application is therefore granted

c) Costs shall abide the outcome ofthe appeal

d)The applicant shall deposit 30o/o of the costs allowed for the respondents , as security for the due performance ofthe decree.

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e) The respondents/ Court bailiff shall release to the applicants, Motor vehicle registration number UBQ 363 M.

f) The applicant is hereby ordered to take all necessary steps to ensure that MISC. Application No. 249 of 2021 the appeal/validation is ready for hearing at the earliest time possible.

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## I so order.

Dated, signed and delivered at Kampala this .................................... 2024

cesmi!

**C. GASHIRABAKE**

**JUSTICE OF APPEAL**