Uganda Muslim Supreme Council v Kyabahwa Justus (Civil Application 1202 of 2023) [2023] UGCA 365 (29 November 2023)

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

## CIVIL APPLICATION NO. I2O2 OF 2023 [Arising from Civil Appeal No. 893 of 2023] [Arising from Miscellaneous Application No. 928 of 2023 [Arising from Civil Suit No. 505 of 2023]

### BETWEEN

## UGANDA MUSLIM SUPREME COUNCIL: : : : : : : : : : : : : : : : : : : : APPLICANT

### AND

# 15 KYABAIIWA JUSTUS:::::::::::::::::::::::::::::::::::::::::::::RESPONDENT

## RULING BY CHRISTOPHER GASHIRABAKE, JA (Sitting as a single Justice)

- <sup>20</sup> This is an application brought by Notice of Motion under section 33 of the Judicature Act, Rules 2(2), 6(2)(b), 43 and 44 of the Judicature (Court of Appeal Rules) Directions SI 13 - 1 0 where the Applicant seeks for orders that: - 25 Execution of the judgment and decree in High Court Civil Suit No. 505 of 2023 be stayed pending the hearing and final determination of Civil Appeal No. 893 of 2023 in the Court of Appeal. 1 - 2. Costs of the application abide the outcome of the appeal. - <sup>30</sup> The grounds of the application were stated in the Notice of Motion and in the affidavit deporrcd by Muhammad Ali Aluma, the Applicant's Deputy Secretary General in Charge of Finance and Administration and I may not repeat the same here verbatim. In summary however, he stated that: - - 3s <sup>I</sup> The Respondent by way of a summary suit sued the Applicant vide HCCS No. 505 of 2023 for a declaration that the Applicant is indebted to the Respondent in the sum of UGX 18,909,184,000/: (Uganda Shillings Eighteen Billion, Nine Hundred and Nine Million, One Hundred and

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Eighty-Four Thousand only) an order for the payment of UGX 18,909,184,000/: (Uganda Shillings Eighteen Billion, Nine Hundred and Nine Million, One Hundred and Eighty-Four Thousand only), and costs of the suit.

- The claim was based on a land sale transaction between the Applicant and the Respondent. 2 - The Applicant vide High Court Miscellaneous Application No. 928 of 2023 applied for unconditional leave to appear and defend the suit which was dismissed by the High Court on the 07th of August, 2023 after which, the High Court proceeded to enter judgment for the Respondent in the sum claimed. 3 10 - The Applicant has since appealed to this Court vide Civil Appeal No. 893 of 2023. 1s4

The Applicant vide High Court Miscellaneous Application No. 2324 of 2023 applied for stay of execution of the decree of the High Court and the same was dismissed. 5

- Execution has been issued against the Applicant for attachment and sale of its various properties. 6. - 2s7 The Applicant stands to suffer irreparable loss once execution is allowed to proceed as the Applicant's property shall be sold in execution of the decree of the High Court. - 30 8 If the Application is not granted, the Applicant's right of appeal would be crippled by execution and render the appeal pending determination by this Court nugatory and academic.

The Respondent filed an affidavit in reply on the 14th of November, 2023 opposing the Application. ln summary, the Respondent stated that: -

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The Applicant had failed to demonstrate any likelihood of success in the intended appeal in that the points proposed to be taken on appeal are frivolous and,/or vexatious. Furthermore, that those points are repetitive 1

and have no sound foundation in the Law and/or have already been determined by superior Courts and some of the issues proposed for the appeai are factually incorrect.

s2 That the Applicant will not suffer any harm that cannot be adequately compensated by an award of damages or at all.

J Execution against the properties proposed has no bearing on the existence of the Islamic faith and the claims in respect thereof by the Applicant are preposterous.

- No appeal will be rendered nugatory if this application is dismissed in as much as the Applicant failed to demonstrate that it shall suffer harm that cannot be atoned by an award of damages. 4 - The balance of convenience and interests of justice demand that the application is dismissed with costs. 5

#### Representation

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The Applicant was represented by Mr. Kabega Moses and Mr. Abbas Bukenya, whereas the Respondent was represented by Mr. Kalule Ahmed Mukasa and Mr. Mugisha Akleo.

### <sup>25</sup> Applicant's submissions

Mr. Kabega Moses adopted the Applicant's written submissions.

Counsel submitted that the conditions for a grant of an order for stay of execution have long been settled by the Courts to be that: -

- (a)The applicant must establish that the intended appeal has a likelihood of success. - (b) It must also be established that the applicant will suffer irreparable damage or the appeal wiil be rendered nugatory if the order of stay of execution is not granted.

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- (c)If any of the above have not been satisfied, Court must consider where the balance of convenience lies. - (d) It must also establish that the application was instituted without delay. - 5

Counsel relied on the decision of Gashumba Maniraguha Vs Sam Nkundiye SCCA No. 24 of 2015. He further submitted that under Rule 6 of the Judicature (Court of Appeal Rules) Directions SI 13 - 10, the rules of this Court do not give conditionalities to do with giving security for due performance of the decree as may be ultimately binding upon the Applicant.

On the likelihood of success of the appeal pending in this Court, Counsel submitted that at this stage, a1l that the Court ought to be satisfied with is that the appeal raises issues which merit consideration. He relied on the case of

- Kirumira Adam and another Vs Kamala Lalani and another Civil Application No. 270 of 2023. Counsel contended that the points taken on appeal and enumerated in the Memorandum of Appeal filed in this Courl are neither frivolous nor vexatious. Those points are that: - 15 - (a)The learned trial Judge erred in law and fact when she relied on an unstamped agreement unto which the cause of action was premised and entered judgment in favor of the respondent thereby occasioning <sup>a</sup> miscarriage of justice. 20 - (b)The learned trial Judge erred in law and fact when she refused to strike out the respondent's affidavit for containing provisions of the law. 25 - (c) The leamed trial judge erred in iaw and fact when she summarily disposed of the case and prematurely determined issues determinable after hearing ofthe parties which in effect denied the appellant'a right to be heard. <sup>d</sup> - (d)The learned trial Judge erred in law and fact when she clothed herself with jurisdiction which she did not have in view of a clear and unequivocal arbitration clause in the agreement thereby occasioning a miscamiage ofjustice.


- (e)The learned trial Judge erred in law and fact when she found that the appellant's application for leave to appear and defend did not raise triable issues whereas not thereby occasioning a miscarriage ofjustice. - (f) The leamed trial Judge erred in law and fact when she ordered the payment of stamp duty after delivery of the ruling in Miscellaneous Application No. 928 of 2023. - (g)The leamed trial Judge erred in law and fact when she denied the appellant its non - derogable right to a fair hearing in Civil Suit No. <sup>505</sup> of 2023 and condemned the appellant to pay the sum of UGX 18,909,184,000/: (Uganda Shillings Eighteen Billion, Nine Hundred and Nine Million, One Hundred and Eighty-Four Thousand only) and costs of the suit thereby occasioning a miscarriage ofjustice.

Counsel submitted therefore, that in view of the above, the Applicant has a likelihood of success in the pending appeal.

20 On the issue of irreparable harm, Counsel submitted that it stands to suffer irreparable harm once the execution is allowed to proceed in so far as the Applicant's property shall be sold in execution of the decree and that the recovery of these properties from third parties may be impossible in the event that the appeal is determined in the Applicant's favor.

- 25 Furthermore, Counsel submitted that the properties proposed to be attached are the basis of the Applicant's operation and existence it being a religious organization. - 30 On balance of convenience, Counsel submitted that allowing execution to proceed would cause greater hardship to the Applicant than it would to the Respondent, given Counsel argued, that it would be impossible to recover the attached properties from third parties in case the appeal was determined in favor of the Applicant. - <sup>35</sup> Lastly, Counsel submitted that the application has been brought without delay.

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## Respondent's submissions.

Mr. Kalule Ahmed Mukasa adopted the Respondent's written submissions.

- 5 Counsel submitted that in order for the Court to exercise its discretion to grant an order for stay of execution, the Applicant has to prove the conditions for its grant. Further, that failure to prove likelihood of success or irreparable harm or that the appeal will be rendered nugatory must result in the refusal of the application. - 10

Counsel further submitted that although the Court at this stage is not required to delve into the merits of the intended appeal, it is also not true that the Law makes it enough for the Applicant to simply vaguely state that its appeal has a likelihood of success without demonstrating the evidential foundation for such

- 15 an asseftion. That the Applicant must demonstrate that the points proposed to be taken on appeal are not frivolous or vexatious. Counsel relied on the case of Gashumba Maniraguha Vs Sam Nkundiye SCCA No. 24 of 2015. - 20 On likelihood of success, Counsel submitted that the Applicant did not demonstrate in the affidavit in support of the application that it has a likelihood of success in the intended appeal because the points proposed to be taken on appeal are frivolous and/or vexatious, are repetitive and have no sound foundation in the Law and/or have already been determined by superior Courts. Fufihermore, that some of the issues proposed for the appeal are factually incorrect. Counsel submitted that: - - 25 - (a)the proposed issue of the lower Court allegedly relying on an unstamped agreement and ordering for the payment of duty afterwards has already been decided as a lawful position in this Court. - 30 35 (b)the issues to do with refusing to grant leave, summarily dismissing the suit and finding that the application for leave to appear and defend did not raise triable issues and therefore, allegedly denying the Applicant the right to be heard are factually incorrect because the Applicant was heard and there was therefore, no failure ofjustice. That indeed, the Applicant concedes as much in paragraphs 4,5,6 and 7 of the affrdavits in support ofthe application.


- (c) that the lower Court did not have the jurisdiction to hear the matter in view ofa vague arbitration clause is an egregious suggestion that has no basis in Law. - (d) given the wealth of authorities of this Court and the Supreme Court, the Applicant's proposal on appeal that the lower Court refused to strike out the Applicant's affidavit in reply to the application for leave to appear and defend for allegedly containing provisions of the Law is frivolous. - Counsel further submitted that at the center of this dispute is the Respondent's demand for payment of money due from the Applicant for purporting to sale land to the Respondent that never was. That this refund of the purchase is provided in the parties' agreement to be with a determined interest. However, that none of the issues proposed to be taken to appeal addresses this issue in any 10 - way. Counsel argued that the Applicant is indulging in peripherals to avoid or delay paying the Respondent. Counsel contended that on the failure to meet this condition alone, the application ought to be dismissed. He relied on the decisions of Dr. 15 - Muhammed Ahmed Kisuule Vs Greenland Bank Limited [in Liquidation] SCCA No. 07 of 2010, and Horizon Coaches Limited Vs Mbarara Municipal Council and others CACA No.07 of 2014. 20

On irreparable harm, Counsel submitted that harm which the Court must prevent by a grant this application is not every harm that may possibly be suffered by the Applicant. That it is only that harm which cannot be compensated by an award of damages. He relied on the decision of American Cyanamide Company Limited Vs Ethicon U975] AC 396.

Counsel submitted that the Applicant had not suggested anywhere in this application that the harm which it may allegedly suffer cannot be compensated in damages. That there is at least, no averment to that effect and accordingly, that the order of stay must be refused. Counsel relied on the decision of Dr. Muhammed Ahmed Kisuule Vs Greenland Bank Limited [in Liquidationl SCCA No. 07 of 2010, where an application for stay of execution was refused for this reason. 30 35

Counsel submitted that all the Applicant has done is to vaguely and speculatively state in paragraphs 15, 16 and 17 ofthe affidavit in support ofthe

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application that it will suffer harm if the execution of the decree is not stayed and that its appeal will accordingly, be rendered nugatory. Counsel contended that those generic averments without sufficient particulars do not meet the requirements of the Law and relied on the decisions of Pan African Insurance

- 5 Company Uganda Limited Vs International Air Transport Association Miscellaneous Application No. 86 of 2006 and China Communication Construction Company Limited Vs Justus Kyabahwa Miscellaneous Application No. 629 of 2019. - Counsel argued that it is not enough for the Applicant to state, as it has done in this application, that the Respondent has taken out execution and will therefore, suffer loss. That the Applicant must demonstrate what irreparable loss it is likely to suffer. He relied on the case of Stanbic Bank Uganda Limited Vs Atabya Agencies, SCCA No. 31 of 2004, Mulenga JSC (RIp). 10

In addition, Counsel for the Respondent urged the Court that the Respondent,s quest in execution is the enforcement of a purely monetary claim and that there is no special quality attached to such a claim as would for example, be attached to a dispute involving ownership of a residential holding. counsel argued that in such cases, no question of irreparable damage arises. He relied on the decision of American Cyanamide Company Limited Vs Ethicon [19751 AC 396 and China Communication Construction Company Limited Vs Justus Kyabahwa Miscellaneous Application No.629 of 2019.

25 Counsel argued that the assertion that the properties sought to be executed against are the basis of the Applicant's operation and existence as a religious organization is merely intended to blackmail the Court into believing that allowing execution to proceed shall have a profound effect on the existence of the Islamic faith.

Lastly on this point, Counsel submitted that it is speculative for the Applicant to assert that if execution proceeds against the Applicant's properties, they may never be recovered. counsel submitted that this is not a ground for allowing this application.

On balance of convenience, Counsel submitted that apart from taking the Respondent's money, the Applicant did nothing to fulfill iis obtigations in the agreement of sale. That the Applicant did not deliver possession of the suit land


in 60days and also ensure that the land is transferrable to the Respondent. Consequently, that the Respondent sued the Applicant and obtained judgment which the Applicant cannot stop enforcement on account of flimsy excuses.

5 Lastly, on security for due performance of the decree as may be ultimately binding upon the Applicant, Counsel submitted that in his view, having failed to meet the rest of the conditions for the grant of the order, even if the Applicant had offered security, which it did not, it would not lead to a grant ofthis order.

### <sup>10</sup> Applicant's submissions in rejoinder.

In rejoinder, Counsel for the Applicant emphasized that at this stage, the Court is not required to resolve the issues on appeal. That it is enough for purposes of this application that the intended appeal raises points which are arguable. Furthermore, that an arguable appeal is not an appeal that will necessarily succeed but one which ought to be fully argued before the full Court.

On the issue of irreparable harm and balance of convenience, Counsel repeated their submissions and underscored that if execution is allowed to proceed, they will never be able to recover their properties from third parties who will claim to be bonafide purchasers for value.

25 On security for due performance of the decree as may be ultimately be binding upon the Applicant, Counsel submitted that the Rule 6 of the Judicature (Court of Appeal Rules) Directions SI 13- 10 does not make the provision of this security a condition for the grant of this order. Accordingly, that the non provision of security by the Applicant cannot be a ground for refusal of this application.

#### <sup>30</sup> Analysis of the Court.

Under Rule 2(2) of the Judicature (Court of Appeal Rules) Directions SI 13- 10, this Court has the inherent power to make such orders as may be necessary for attaining the ends ofjustice or to prevent abuse of its process or the process of the High Court. Furthermore, under Rule 6(2) (b) of the Judicature (Court of Appeal Rules) Directions SI 13- 10, in any civil proceedings, where a notice of appeal has been lodged in accordance with rule 76 of these Rules, the Court

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may order a stay of execution, an injunction, or a stay of proceedings on such terms as the Court may think just.

5 The conditions for the grant ofan order for stay of execution have been restated in a long line of decisions of this Court and the Supreme Court. In Hon. Theodore Ssekikubo & Others Vs The Attornev General and Another Supreme Court Constitutional Application No. 06 of 2013. the Supreme Court stated as follows: -

' 'In order for the Court to grant an application for stay of execution;

- (, The applicant must establish that his appeal has a likelihood of success; or a primafacie case of his right to appeal. - (il It must dlso be established that the applicant will suffer irreparable damage or that the appeal will be rendered nugatory if the stay is not granted. - (ii, If I and 2 above has not been established, Court must consider where the balance ofcontenience lies.

(iv) The applicant must also establish that the application instituted without delay. " was

25 In this matter, it is not in dispute that the application for stay of execution was urgently filed in this Court following the dismissal of a similar application in the Court below.

## Likelihood of success of the appeal.

30 It is not novel that at this stage, this Court is not required to delve into the merits of the pending appeal. The requirement at this stage is for the Court to be satisfied that the grounds of the appeal are not frivolous or vexatious and merit consideration on appeal. In Gashumba Maniraguha Vs Sam Nkundive SCCA No. 2015, the Supreme Court held that: -

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"...further in our view, even though this court is not at this stage" deciding the appeal, it must be satisfied that the appeal raises issues which merit the consideration of the Court''

- I have perused the application in this matter. The affidavit in support of the $\mathsf{S}$ application and the annexures thereto give a detailed account of what transpired in the Court below. I am not convinced that the Applicant has demonstrated a likelihood of success in the pending appeal. - It is vexatious for instance, for the Applicant to allege that its application for 10 unconditional leave to appear and defend the suit was summarily dismissed when, in fact, both parties were duly heard by the lower Court. By its very nature, the purpose of summary procedure is to prevent defendants from presenting frivolous or vexatious defenses in order to unreasonably prolong litigation. It is designed by the rules of procedure to be a swift remedy where 15 there is no arguable defense to the suit. See the case of **Post Bank (U) Limited** Vs Abdul Ssozi SCCA No. 08 of 2015.

Therefore, where a defendant on a summary plaint is unable to demonstrate that he has any triable issues, the trial Court is entitled to enter judgment for the 20 plaintiff. Such defendant cannot in my view, subsequently assert, as the Applicant does in these proceedings, that he was denied a right a fair hearing.

The Applicant has also proposed questions on appeal whether the Respondent's affidavit in reply to the application for leave to appear and defend should have 25 been struck out for allegedly containing provisions of the Law and the lower Court relying on an agreement whose stamp duty had not been paid. I agree with Counsel for the Respondent that there is a wealth of superior Courts' authorities to the contrary. See for example, Shamsherali Zaver Virji Vs F. L.

Kadibhai and others Civil Appeal No. 81 of 2004 and Besigye Kiiza Vs 30 Museveni Yoweri Kaguta and Another, Presidential Election Petition No. 1 of 2001 and No. 1 of 2006.

It is now settled that Court cannot dismiss a suit merely because the stamp duty has not been paid on the documents relied upon to bring the claim. Equally 35 settled is the Law that an affidavit cannot be wholly struck out where severance of the offending parts is an option. I believe this is in line with the provisions of

Article 126 (2) (e) of the Constitution which enjoins this Court to administer substantive justice without undue regard to technicalities.

5 On the question of the lower Court assuming jurisdiction that it allegedly did not have in view of an arbitration clause, I am of the view that the point proposed to be taken on appeal is frivolous, for; the Applicant carurot and could not run away from Court and hide, as the lower Court found, in some inoperable arbitration clause. Indeed, even in circumstances where the arbitration clause is valid, the trial Court is still entitled to enter judgment on any undisputed amount. In Ellis Mechanical Services Limited Vs Wates Construction Limited [971] 1 Llovds Reports 33, Lord Denning MR at page 35 held as follows: - 10

"There is a point on the contract which I might mention upon this. There is a general arbitration clause. Any dispute or dffirence arising on the matter is to go to arbitration. It seems to me that if a case comes before the Court in which, although a sum is not exactly quantified and although it is not admitted, nevertheless the Cotrt is able, on an application of this kind, to give summary judgment for such sum as appears to be indisputably due... then the Court can give judgment for that sum..."

In the trial Court, the amount claimed by the Respondent was indisputably due in accordance with the agreement of the parties. The trial Court was entitled, in my view, to give summary judgment therefore.

I also agree as submitted by Counsel for the Respondent that all points proposed to be taken on appeal are peripheral to the central or substantive question in this dispute - the Applicant's obligation to pay to the Respondent money to due him in accordance with the agreement of the parties. I did not see anywhere in the proposed grounds of appeal where the Applicant proposes to contest this obligation in this Court. I think that as a matter of substantive justice, it is wrong for the Applicant to invest itself in red - herrings rather than attend to the substance of the dispute.

Consequently, I find that the Applicant has failed to prove this condition for the grant of an order for stay of execution.


#### Irreparable harm

The Applicant contends that it will suffer irreparable loss once execution is allowed to continue in that its property will be attached and sold in execution. Furthermore, that if the execution were allowed to continue, the Appricant's right of appeal will be rendered nugatory.

It is my view, first, that it is not sufficient for the judgment - debtor to say that he is vulnerable, because the successful party may take out execution proceedings against it. It must be shown by clear evidence that if execution proceeds there may be some irreparable loss caused. See wilson Mukiibi vs James Semusambwa SCCA No. 9 of 2003 and Stanbic Bank Uganda Limited Vs Atabya Agencies, SCCA No.3l of 2004. 10

- Furthermore, as counsel for the Respondent submitted, irreparable harm which the court must prevent by a grant of an application of this nature is not every harm that may possibly be suffered by the Applicant. It is only that harm which cannot be compensated by an award of damages. See the decision of American Cyanamide Company Limited Vs Ethicon [1975] AC 396. 15 - 20

I agree with counsel for the Respondent that the Applicant has not brought forth sufficient evidence that it will suffer harm that cannot be atoned by an award of damages. Indeed, ail the Applicant has done is to urge the court that if execution proceeds, it may never be able to recover its properties from third parties. In my view, recovery of a property sold in execution of a decree and atonement of damage that may arise thereby, are two different things. It is possible that judgment - debtor whose property is sold in execution of a decree may never be able to recover the same, yet any damage that may be suffered thereby can be atoned by an award of damages. Clearly, the fear of loss of property in consequence of execution does not mean that the Applicant shall suffer harm that cannot be adequately compensated in damages.

# In Stanbic Bank Uganda Limited Vs Atabya Agencies, SCCA No. 3l of 2004, Mulenga JSC (RIP) held that: -

"A party seeking a stay of execution must satisfy the court that there is sfficient cause why the party with judgment should postpone the enjoyment of its benefits. It is not sfficient 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 iteparable loss caused. "

5 I have seen no such evidence of irreparable loss in this matter.

Furthermore, I accept the Respondent's submission that where the judgment creditor's quest in execution is the enforcement of a purely monetary claim - a sum ofmoney adjudged as owing to the Respondent or judgment creditor, there

is no special quality attached to such a claim. In American Cyanamide Company Limited Vs Ethicon [19751 AC 396, it was held that in such cases, no question of irreparable damage arises. See also China Cornmunication Construction Company Limited Vs Justus Kyabahwa Miscellaneous Application No.629 of 2019. 10

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I therefore, find that there is no harm or damage that may be suffered by the Applicant which cannot be atoned by an award of damages.

#### Balance of convenience

In the circumstances of this case, the Applicant has failed to prove that it has a likelihood of success in the pending appeal or that it will suffer any damage or harm that cannot be atoned by an award of damages. Clearly, the balance of convenience would be in not granting this application for stay of execution but to allow the party with the judgment in hand to proceed with the execution 20

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> Consequently, for the reasons I have given above, this application is dismissed. The costs shall abide the outcome of the appeal.

By reason of this decision,, Civil Application No.1204 of 2023l. Uganda Muslim Supreme Council Vs Kyabahwa Justus for an interim order for stay of execution is overtaken by events and is also hereby dismissed with costs. 30

Dated at Kampala this day of 023.

C. GASHIRABAKE JUSTICE OFAPPEAL